Generator Hire Business is Booming

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UK Plant Hire Sector Seeing Steady Growth That is Set to Continue

A leading research company has reported increasing confidence in the plant hire sector, which is worth around £3 billion per year.

There are positive signs for the UK plant industry according to AMA Research, a market leader in building and construction research, which published its “Plant Hire Market Report – UK 2016-2020 Analysis” in May 2016.

The report indicates steady growth of 3-5% over 2015 and 2016 and forecasts that this pattern will continue over the coming years. The underlying drivers are an overall improvement in market conditions since 2014 and, in particular, an increase in construction. These are positive signs for not only the hire business, but also for the UK economy as a whole.

AMA’s Director of Research, Andrew Hartley, remarked. “As market conditions improve, companies are expected to begin updating and expanding their fleets, and many hire companies have already implemented investment plans.”

Increased Construction

AMA estimates that the construction industry accounts for around two thirds of the plant hire market, so clearly, the business is heavily dependent on the amount of construction activity going on.

A number of major infrastructure projects, such as Crossrail in London and the Big City Plan in Birmingham, are significant in ensuring the medium term strength of the market, and as the economy continues to show improvement, similar projects are likely to follow.

Indeed, infrastructure in general forms by far the largest end-user segment, followed by house-building, offices, educational and industrial.

The report points out that the construction industry uses a wide variety of hire equipment. While earth-moving machinery is the largest sector, at about one third, generator hire is also key, along with compressors, pumps and lifting equipment.

Non-construction Industries

The other third of the plant hire market, loosely termed as “non-construction,” encompasses a wide range of end-users. Examples include manufacturing, events, recycling and domestic customers.

While the plant hire business generally sees these as secondary to the construction industries, it was, nevertheless, on these markets that many hire companies focused on in order to survive the challenging financial times of 2012-2014.

Some key infrastructure projects are concluding around 2019, so the importance of the non-construction sectors in maintaining long-term growth must not be underestimated.

Other Factors

There are some external factors that also affect the hire sector, and these have little to do with the economy. For example, weather plays a huge role, with big spikes in demand during and following extreme weather, such as snow, flooding and high winds. In addition, AMA predicts that ever-growing HSE legislation will bring added impetus to the market.

Consumer behaviour, in terms of whether to buy or hire is also key. There is an argument that overall improvements in financial conditions will lead some consumers to purchase their own equipment. However, this will always be tempered by the value-added benefits that hiring brings, such as guaranteed maintenance and 24/7 support.

AMA Research

The report was issued by AMA Research, which publishes almost 200 reports, bulletins and databases that cover the building, construction and environmental sectors. With over 25 years’ experience, they are considered UK leaders in their research area.

 

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