ERA updates forecasts for Europe’s rental market

Europe’s equipment rental market is forecast to see a +1.7% compound annual growth rate (CAGR) between 2025 and 2027, taking the total rental market to €34 billion by 2027, according to a market update by the European Rental Association (ERA) and its consultant KPMG.

Martin Seban, director of strategy and operations at KPMG France, speaking at the ERA’s annual convention in Maastricht, The Netherlands, said southern Europe - Spain, Italy and Portugal - would see the fastest growth rate over the three years, at +5.1%, followed by the Nordics at +3.2% and Eastern Europe, with +2.1% CAGR growth.

Western Europe, including France, Germany, Belgium, the Netherlands, Switzerland and Austria, are expected to see a CAGR of just +0.8%, while the UK and Ireland will together expand by just 0.6%.

Martin Seban of KPMG at the 2026 ERA Convention in Maastricht. (Image: ERA / Maurice Vinken / kleurstof.eu)

Seban said the rental market was being impacted by lower confidence related to the impacts of inflation, conflict in the Middle East and Europe and a generally soft construction markets.

A positive feature, however, is growing rental penetration rates and greater demand for rental services in non-construction markets, including energy, events and manufacturing.

Western Europe downgrades

In Western Europe, KPMG and ERA have downgraded their expectations for France and the Netherlands, with the French rental market forecast to contract by -1.5% this year following a flat 2025, and with zero growth expected in 2027.

The Netherlands is forecast to expand by +2.5% this year – a downgrade of more than 1 percentage point on the previous forecast – before growing by +2.6% in 2027.

Germany is forecast to expand by around +2% in both 2026 and 2027, while growth in Belgium, Switzerland and Austria is not expected to exceed +1.0% in either 2026 or 2027.

The UK rental market is forecast to be slightly better than France, but will still only see growth of +0.5% this year followed by +0.4% in 2027. This contrasts with the Republic of Ireland, where rental market growth in both years is forecast to exceed +4%.

Best performing countries

The best performing countries remain southern Europe, with KPMG expecting growth exceeding +4% in Italy in 2026 and 2027 and around +5.5% in Spain. Portugal is the star market, with growth expected to be +7.5% in both years.

For the Nordics, ERA and KPMG is expecting annual growth rates this year and next of between 2.5% and 3.7%, with Norway Sweden and Finland leading the way with +3% growth rates. Denmark is expected to see more modest growth of +2.5% in 2026 and 2027.

Poland and the Czech Republic are expected to expand by +2% to +2.8% rates for each of 2026 and 2027.

Speaking in Maastricht, Martin Seban said forecasting had become more and more difficult because of wider economic uncertainties related to conflict in the Middle East, tariffs, continued war in Europe, inflation and energy costs.

Growing rental penetration 

He said rental markets were growing faster than underlying GDP growth; “actually, the rental industry managed to increase quicker than the underlying driver [construction]. And that’s really interesting because one of the engines for growth is actually rental penetration.

“It’s not a secret that construction is not doing well. There were some signs of recovery recently, but industry and the construction industry as a whole has been suffering for quite some time in many of the countries in Europe.

“So, construction is not the first engine for what you can see in the countries that are doing relatively well - but mainly it is the ability for the rental activity to increase the scope of business and to work with other segments.”

He said the economic uncertainties facing all business were impacting on confidence levels; “and, ultimately, the ability of your clients to invest in their projects. On top of that, there’s an impact from inflation. It’s getting more difficult to finance projects, to get some visibility and basically to be confident enough to engage in a new project.”