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The IRN100 – revealing the largest equipment rental companies – shows an industry outperforming the global economy, but the figures don’t tell the whole story

If last year’s IRN100 – based on figures from 2022 – reflected an industry catching up post-Covid, grappling with supply chain issues, high inflation and the impact of the Russian invasion of Ukraine, this year’s survey reflects a calmer 2023, with respectable growth rates despite a slower economic backdrop. This is an edited version of the full list, which was first published in the June issue of International Rental News.

Revenues for the top 100 companies increased by 10.4% to €73.1 billion. That increase rises to 13.4% after correcting for exchange rate fluctuations, with revenues at 2022 exchange rates reaching €75.1 billion in 2023 compared to €66.2 billion in 2022.

Kiloutou is in 15th position in the ranking, the same as last year

IMAGE: ADOBE STOCK

That is a significant rise, although inflation rates should be borne in mind: average inflation in the Eurozone area in 2023 was around 4-5%; it was close to 4% in the US; and nearer 7-8% in the UK.

That still sees rental growth exceeding wider economic Gross Domestic Product (GDP) growth, which was less than 1% for Europe, around 2.5% in the US and 2% in Japan.

North America leads

Geographically, North America continues to lead in several metrics. The region is the most represented. Given this, it’s unsurprising that North American revenues account for more than half of the total. Four of the top five companies are US-based, and their average growth rate was more than 14%, reflecting both acquisitions and organic growth.

In fact, the top 15 companies from the region contribute 45% of the total revenue, with United Rentals notably breaking the €10 billion barrier for the first time.

Some major acquisitions have yet to feed into the 2023 data: notably Boels' proposed acquisition of Riwal, which would add more than €300 million in revenues, and WillScot Mobile Mini’s multi-billion deal to buy McGrath RentCorp, which had still to be concluded as IRN went to press. Likewise United Rentals’ US$1.1 billion acquisition of Yak Access, announced in March this year.

Rental firms are performing well despite challenging circumstances

Regional trends

Even in Europe, where the economy has been flattish, there has been some decent growth last year: the largest 15 Europeanbased companies reported 9% growth, with companies including Renta, Kiloutou, GAM and GAP Group all reporting 15% increases, with acquisitions often playing a big part. Looking at North America, we estimate that EquipmentShare generated revenues of somewhere in the region of €1.75 million in 2023, enough to place it inside the top ten for the first time.

Japan has five of the largest rental businesses in the world and they are also growing in their ‘local’ regions – China, South East Asia, and Australia – while one of these, Kanamoto, is even looking at opportunities in the US.

The reason is clear to see: with their domestic market experiencing only modest development, there's seemingly a limited scope for transformational growth in Japan (unless firms start to acquire others). The Yen’s weakening against the Euro in 2023 saw revenues at Japan’s top five companies in the IRN100 actually decline year-on-year, although when corrected for currency changes there is average growth of 5.5%.

Fleet investment rises

In terms of fleet investment, following a €13.0 billion gross spend on new equipment in 2022 by the top 25 investors in the list, the figure for 2023 is up 10% at €14.3 billion. Spending remains at historic highs, although whether that will be sustained remains to be seen.

Around 60% of the spending by the top 25 investors is by four US-based companies. The highest spending European company is Boels, who invested €543 million in 2023.

According to the latest forecast from the American Rental Association (ARA), the equipment rental industry in the US could reach $79.2 billion in 2024, a 2.8% jump from previous estimations which predicted a total of $77.3 billion.

A softer period of growth is expected beyond 2024, however, with the ARA predicting growth of 3.8% in 2025 and 3.1% in 2026.

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ABOUT INTERNATIONAL RENTAL NEWS

International Rental News is essential reading for the growing global rental market. The magazine is published six times a year and also has a show, the International Rental Exhibition. The IRN100, a list of the top 100 rental companies by turnover – of which this article is an edited version – is published in the June issue.

A softer period of growth is expected beyond 2024 for the sector

That prediction is mirrored in Europe, which, according to Martin Seban of KPMG – working with the European Rental Association (ERA) – is expected to see a soft landing in terms of growth following the Covid years.

Speaking at the ERA Convention in May, he predicted that softer demand and slowdown of rental activity will see an increase of 1.3% for 2024 and 1.5% for 2025. The story for China is one of an industry in a cooling off period; partly driven by a stronger Euro than in 2022 and a drop in some specialist markets such as tower crane rental, which is dependent on the country’s troubled real estate sector.

So, in summary, a decent year for the global rental industry overall. The trajectory – despite a sluggish global economy and deeply challenging issues including wars, climate change, and political uncertainty – remains in the right direction. All in construction should take comfort in that.

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