While the outlook for 2024 is less positive, the European Leasing Association (ERA) has raised its forecast for rent growth in 2023 due to better-than-expected growth in the construction sector.

      As a result of the better-than-expected performance of the construction market, ERA's adviser S&P Global has raised its 2023 rental growth forecast for all but two of Europe's eight largest rental markets.

       France is now expected to grow by 3.1 per cent, rather than 1.8 per cent at the end of 2022. Growth rose from 2.4% to 4.3% in Germany and from 4.4% to 6.5% in Italy. Norway (6.0%), Spain (5.2%) and the United Kingdom (3.3%) all saw increases of around 1.0%.

      Only Sweden and Norway have seen their 2023 rental growth forecasts revised downwards: growth in the Netherlands is now expected to be 2.4% rather than 2.6%, while Sweden's forecast has been cut from 1.8% to 1.0%.

       However, speaking on the second day of the ERA conference, Standard & Poor's Global Associate Director Sevra Rende said growth rates will fall back in most major European markets in 2024, with the exception of the Netherlands, Spain and Sweden.

       Growth in 2024 is expected to be between 2.0% and 3.5% in most markets, but higher in the Netherlands (4.0%), Norway (4.6%) and Spain (8.1%).

       "I think the equipment rental market will continue to outperform construction," Rende said. "However, we expect it to weaken somewhat at the activity level."

        The residential market will continue to provide good opportunities for the rental market, as will infrastructure projects, she said. "There is still a lot of infrastructure work going on in Europe, especially with the support of the European Recovery and Resilience Fund. This will also support the equipment rental business."