The UK construction equipment rental industry is extremely competitive and relatively fragmented, and ranges from national equipment rental companies to local independents operating in the market. Companies range widely in terms of geographical coverage, financial resources, brand recognition and equipment offered. Some companies are more reliant on construction whereas other companies have developed more diverse markets, such as manufacturing, recycling and events. The market experienced modest growth for the period 2010-2013, but increased significantly in 2014 due to improvements in both housing and non-domestic building markets as well as manufacturing and other non-construction end-use sectors. From 2015 onwards the market once again reverted to modest but steady growth levels similar to pre-2014 levels.
The construction equipment rental market is extremely diverse, with equipment ranging from tools to excavators. Demand for each type of equipment varies, reflecting a combination of factors. The primary driver is the performance of the end-use sectors requiring the equipment; e.g. planers, pavers and rollers depend on the level of highway repair activity; forklift hire is influenced by the level of distribution & warehouse activity; other factors such as the weather impact on the level of hire of some types of equipment (e.g. pumping and climate control). In terms of market share by product sector, earth moving equipment represents the largest equipment sector, accounting for almost a quarter of hire value. Other key sectors include lifting, access equipment, skips & rubbish chutes, portable buildings & environmental control and hand & power tools.
In terms of end use sectors infrastructure remains key, although certain parts of the infrastructure sector have performed differently in recent years, with for example the rail sector declining in recent years, whilst the utilities sector (particularly electricity) has performed well. Other key end-use sectors include housebuilding, offices, education and industrial, while major non-construction sectors include manufacturing, waste management and events. Of course, the level of hire is also dependent on companies opting to hire rather than buy. Many companies choose to hire plant and tools, generally to avoid risk – in particular capital investment risk, operating risk and legislative/compliance risk.
For market trends in the construction equipment rental market, the construction industry is increasingly driven towards using environmentally sustainable products. As a consequence, many hire companies are expanding their ranges of eco-friendly equipment. Additionally, the recovery in hire demand in 2014/15 has seen many hire companies investing in fleet upgrades and expansion. Of course, individual hire companies’ experiences tend to vary in terms of product sectors and regional & geographical trends. Companies in the South East, for example, are seeing higher demand from the housebuilding sector than those in the North of England / Scotland.
Looking forward, the range of factors influencing the market are extensive and as such the equipment hired will be influenced by the applications required in each end-user sector as well as other more product specific issues. The biggest risk factor in the forecast will be the effect of the ‘Brexit’ negotiations on the levels of confidence and investment, which in turn impacts on both construction and non-construction activity. Positive influencing factors include the fact that from 2018 onwards several construction sub-sectors are forecast to increase output including infrastructure, entertainment & leisure, industrial and health, as well as housebuilding. Furthermore, additional hire demand will be achieved from non-construction sectors such as manufacturing, events and increasing warehouse capacity (to furnish the growth of Internet shopping and ‘click and collect’ services), etc. Also, health & safety and environmental legislation is likely to continue to impact positively on a range of hire sectors. Overall, despite concerns over potentially negative factors, such as Brexit, impacting business confidence, growth is forecast to continue at a steady rate over the 2017-2021 period.