Construction equipment rental market is more than EUR 3,5 bn in the Nordic countries – Sweden, Norway and Finland. Construction equipment rental is one of the most significant service sectors in construction sites.
Construction equipment rental is growing, even though the construction market is already turning into a slight downward trend next year. High utilization of construction capacity and the shortage of labor is increasing demand for construction equipment.

Housing construction will take a downward trend

The whole construction contracted last year in Sweden and Norway – due to new building construction and, in particular, the contraction of new residential construction. In Sweden, Norway and also in Finland new housing construction has been very lively in recent years.

In Sweden the volume of construction decreased in building construction, in both residential and non‐residential construction. By contrast, civil engineering increased strongly in 2018. In 2019, construction volume continues to contract at the same rate than in previous year. In 2020 volume might contract a bit faster mainly due to a low level of residential construction and the growth will decelerate in civil engineering.

In Norway decline was only temporary and construction growth continues. According to the Euroconstruct forecast, total construction output will grow strongly in 2019. Growth will continue in 2020 but more moderately. The growth results of high civil engineering output, which is driven by public spending in infrastructure projects.

Strong growth in construction equipment rental market will stabilizes

The rental market has been growing strongly for many years. Growth has focused primarily on new building construction in recent years.

The rental volume of construction machinery and equipment will grow a bit in 2019 and 2020 in Nordic countries. Rental business will grow, although construction is expected to decrease slightly. The sharp decline in construction of block of flats will not turn the whole rental business growth negative. The share of equipment that has been used in the block of flats construction is only 15 per cent in the current rental market.

Non-residential construction is becoming the engine of construction equipment rental market. Rental is growing strongly in commercial, office, healthcare building construction. Non-residential construction uses more construction machinery and equipment than residential construction.

The penetration rate for construction machinery rental in Sweden is high. Penetration shows the share of usage of rental equipment of the total equipment use in building construction. Rental penetration is expected to continue to grow.

Even if the majority (2/3) of machinery and equipment rental serves construction business, the use of other industries is large. The remainder is rented to other branches such as industry, service producers, public administration and private persons for maintenance, installation etc. Service industries have increased the use of rental equipment. Especially in Sweden the other use is very important.

Construction equipment rental growth will continue in renovation sector. Growth is accelerated due to replacement of human labor with construction machinery, higher quality requirements and challenging working conditions. Renovation focuses on professional renovation sector, which contributes to equipment rental growth.

Corporate acquisitions tell about the attractiveness of the industry. Loxam has launched a bid to acquire Finnish international rental company Ramirent. High volume, strong growth and positive prospects of the rental services have also interested investors.

More information:
Markku Riihimäki
CEO
Forecon Oy
Tel. +358 40 704 1187
markku.riihimaki@forecon.fi

Tuomas Laitinen
Expert
Forecon Oy
Tel. +358 40 416 3101
tuomas.laitinen@forecon.fi

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