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UK Construction Equipment Rental Market
2007-2013 (£m)
The UK market for construction equipment rental is closely linked
to the overall state of the economy and to general conditions in
construction, manufacturing, infrastructure and utilities, and
DIY/home improvement. At present, the industry is experiencing an
unprecedented downturn due to the global financial crisis, while
many sectors are suffering from the fallout from funding problems,
either through difficulties in raising finance for PFI schemes or
from declining business confidence. The focus of this report is on
construction equipment rental companies and we have defined what,
in our view, constitutes a construction equipment rental company in
order to be more specific on the market size and trends.
The UK construction equipment rental market is
estimated to be worth some £4.4 billion in 2008, having declined by
an estimated 6% in 2008 compared to the previous year. Variable
market performance 2007-2008 reflects the combined impact of modest
growth of around 6% in 2007, followed by a 6% market decline in
2008, mirroring the negative impact of the global financial crisis
and downturn in private residential and some sectors of
non-residential construction.
Many sectors of the hire market have been
adversely impacted by the cancellation, postponement or abandonment
of major construction projects which is threatening to undermine
the financial stability of the rental industry.
Hire market penetration has been assisted by the
development of high productivity multi-functional equipment, for
example telehandlers, which have been the subject of substantial
fleet-building in recent years, but are currently adversely
impacted by the global financial crisis.
The positive impact of health and safety and
energy efficiency legislation has bolstered certain sectors of the
overall construction equipment rental market.
Earth moving equipment, estimated to be the
largest product sector, accounts for around 24% of hire turnover,
while lifting accounts for around 14%, skips and rubbish chutes
around 12%, road making 4%, compressors/generators 4%.
Our estimates are for market decline during
2009-2010 of around 12% over the 2-year period, followed by a flat
2011 before limited market recovery in 2012-2013. It is emphasised
that the economic environment in early to mid 2009 is extremely
volatile, therefore the above forecasts are subject to change, and
it is also difficult to estimate the timing and scale of a slowdown
and eventual recovery. |
