The UK construction equipment infrastructure hire market is estimated to be worth some £687m in 2011, reflecting positive market conditions of around 7-8% growth over 2010. Market performance over the last 3 years has been generally positive, though difficult to estimate, with underlying growth of around 20% over the 2008-11 period – reflecting variable trends within different infrastructure hire product groups and the relative size of government investment programmes in key end use sectors. ONS data indicates infrastructure has grown by over 50% in the 2008-11 period, but this overstates real growth in output and includes some re-classification of data.
Key influences impacting on the infrastructure hire sector include the performance of the UK economy, scale and timing of major investment programmes, health and safety issues, environmental and energy efficiency legislation etc.
Equipment hire varies significantly between projects, with some projects such as gas pipeline laying often spending up to 10% on hire of equipment.
The leading players in the UK infrastructure construction equipment hire market include Speedy Hire, A-Plant, HSS, Ainscough, Harsco Infrastructure Services, Hewden, Lavendon, VP Plc, Hydrex/Network Rail (NDS) Plant, GAP Group, etc., though the market is relatively fragmented due to the high number of specialist operators with different competitors in different hire product sectors.
Earth moving equipment, estimated to be the largest product sector, accounts for over 30% of hire turnover, while lifting accounts for around 20%, pumping, crushing and screening plant 10%, road making, also ‘other’ including primary construction equipment/transport/ancillary, 8%, access equipment 7%, etc.
Uncertainty in the hire industry caused by the cancellation or deferment of construction projects continues to impact negatively on hire companies in the UK. Medium to long term levels of growth in the infrastructure hire sector are likely to be underpinned by major construction projects including, for example, Crossrail, Thames Gateway, Amp5, Thames Tideway Tunnel, road and rail construction programmes, also ports and harbours, gas and communications, and the development of wind turbines.
The progress of infrastructure construction projects continues to be adversely impacted by planning delays, funding problems and lack of finance from the private sector. A key factor in the longer term is uncertainty in Government policy which is undermining confidence in investing in major infrastructure projects. HS2, nuclear energy, wind farms, airport capacity expansion are all examples of lack of decision-making either impacting on investor confidence or slowing down construction programmes which could have a significant positive effect on economic recovery, if implemented quickly.
Current forecasts indicate that the UK infrastructure construction equipment hire market is likely to experience marginal growth at best in 2012/13, before recovering more strongly in 2014-16, reaching a forecast value of around £765m in 2016.