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KEY AREAS

AMA Research have published an intermediate review of the UK Tool Hire Market. The review updates the "UK Tool Hire Market Report 2000" and gives concise revised information on market trends and statistics.

Key sectors covered include:-

• OVERALL MARKET VALUE - current value and future forecasts
• LEADING TOOL HIRE SUPPLIERS
• MARKET SHARES
• PRODUCT MIX
• REVISED FORECASTS.
• TOOL HIRE CUSTOMERS

In addition, the review contains an overview of both the macro and socio-economic influences affecting the UK Tool Hire Market.

2001 Update includes the following tables and charts: -

• The UK Tool Hire Market 1998-2004
• The UK Tool Hire Market at Constant Prices
• Engineering Sales Ouput
• Market Share of Key Suppliers
• Company Financials Update
• Mix of Hire Products through Suppliers
• Regional Variations of New Orders by Contractors
• DIY Consumer / Non Domestic Users for Tool Hire and Equipment
• Future Prospects

The review is written by marketing professionals, with experience in the UK Tool Hire industry, enabling us to provide accurate and detailed coverage of this fast changing market. The report comments not only on what is happening in the industry, but why, and whether it is likely to continue.

This update is published as part of the UK Tool Hire Market Report 2000 (Third Edition) which was originally published in March 2000 and gave a comprehensive review of the UK Tool Hire Market. The review and original report covers over 110 pages. Details of the Tool Hire Market Report 2000 can be seen below:

AMA Research have published the Third Edition of their review of the tool hire sector - ‘The UK Tool Hire Market Report 2000’. This report represents a comprehensive and up-to-date review of the structure of the tool hire industry with particular emphasis on the following:-

• TOOL HIRE MARKET - Size, Structure, Trends, Forecasts.
• HIRE COMPANIES - National, Regional, Local, Specialists, Builders Merchants, Plant Hire.
• ANALYSIS BY PRODUCT GROUP :-

• Access Equipment
• Drilling & Breaking
• Concreting & Compacting
• Cutting & Grinding
• Heating, Cooling & Drying
• Gardening & Landscaping
• Plumbing & Pumping
• Cleaning & Floor Preparation
• Lighting, Welding & Power
• Carpentry & Woodworking
• Miscellaneous Product Groupings - including handling, compact equipment etc.

The Hire market continues to experience major change at present with a combination of market growth and rationalisation of ownership. This unique report reviews developments within the industry, with emphasis on both Quantitative and Qualitative assessment of the market and has been compiled by marketing professionals with a background in building products.

The report reviews the general range of tools and equipment offered by most outlets, but specifically excludes heavy plant, catering, portable sanitation, audio-visual, space accommodation, recreational and furniture hire, and specialist lifting gear operations.

AMA Research are a specialist research company in building products and consumer durables. Other publications include market studies of Plant Hire, Pumps, Abrasives, Portable Power Tools, Builders and Plumbers Merchants, Garden Centres, Housebuilding, HVAC, Lighting, Generators etc.

Key areas of coverage in the report include:-

MARKET

• Market definition in terms of type of outlets and range of products.
• Market size in value terms, 1990-1999 and forecasts up to 2004.
• Market trends during the 1990’s - decline in early 1990’s and recovery in mid-late 1990's. Factors influencing market development (Construction activity, hire rates, new specialist products, growth of DIY market, purchase or hire, privitisation of utilities, local government, work railway infrastructure, etc.).
• Future prospects for hire market - impact of construction activity, new product ranges, product development targeted at hire market, new market entrants etc.

TOOL HIRE COMPANIES

• Total volume of outlets - Multiple branch companies, Builders Merchants, Small Hire Companies.
• Share of Hire Market by Value - Multiples, Builders Merchants, Small hire companies.
• Market shares of major hire companies - growing rationalisation of industry, increasing shares through acquisitions and organic growth, comparison of shares in 1995-1999.
• Review of major national hire companies and larger regional operators - turnover, branches, areas of specialisation etc.
• Competitive structure - major hire companies, Builders Merchants.
• Review of major customers - builders, plumbers, local authorities, utilities, maintenance operations, DIY consumers.

PRODUCTS/SUPPLIERS

• Market size by major product group (see page 3 for list).
• Product mix within major product groups - major sectors.
• Product trends by product group - growth sectors, areas of specialisation, relative importance of hire market.
• Buying and Specification Process - decision-making process for purchasing equipment, key influences, health and safety issues, pricing, replacement cycles, possible emergence of buying groups.
• Major suppliers by product group.
• Impact of acquisitions on equipment replacement/updates.

FUTURE PROSPECTS/HOUSING/CONSTRUCTION

• New build, renovation, RMI, housing trends, building and construction output and orders.
• Future developments, implication for suppliers.
• Economic influences, future growth prospects for the hire market etc.

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EXECUTIVE SUMMARY

The 2000 UK Tool Hire Market is estimated at £685 million, based on 2000 hire prices and product sales prices.
The chart below shows the development of the market for tool hire between 1998 and 2004:-

Source: AMA Research/Trade Estimates

During 1999 the UK construction market experienced some growth, sustained by Millennium projects, investment in hospitals and schools, and an enhanced level of capital expenditure in certain areas of the UK infrastructure, with Facilities Management and outsourcing in particular favouring hire.
2000 performed well, with these factors motivating growth in the second half of the year, after a slower return to work by the building trade than usual at the start of 2000 due to the extended Millennium break. Overall estimates indicate growth of around 4 percent with the market at hire prices rising to around £685 million.

2001 may not perform as well as 2000 due to continued pressure on hire prices and the possibility of an overall economic slowdown. However, reduced capital to spend on tool purchase may boost the sector in terms of hire volume. The market is therefore forecast to rise by around 3 percent to a value of £707 million.
The fuel crisis in September 2000 also had a negative impact on the sector in the short term, as many customers did not have enough fuel to collect tools. Although an element of pent up demand was then released after a short period when the crisis subsided.

The volume rise in tool hire is indicated to have been healthy during 2000, although this was offset by continued pressure on hire prices, leading to lower value growth.

The widespread flooding problems experienced in England during late 2000 / early 2001 is also indicated to have boosted demand for pumping and generator hire. Other specific issues which have boosted the sector to some extent, include recent rail problems, foot and mouth disease and the high level of snow during February 2001. These factors have impacted on tool hire, although plant hire has benefited to a greater degree.

The development of added value benefits such as on-line booking, free delivery, up to date equipment etc., may offer the opportunity to resist pressure on reducing hire prices. This, coupled with continued consolidation in the market and rising construction levels is likely to result in reasonable growth in the medium term.

The emergence of 7/8 large national chains in the market and their increasing dominance is evident, this is likely to continue in the medium to longer term as companies look to reduce costs through economies of scale. HSS Hire has maintained leadership of the Tool Hire market with an estimated 18 percent market share. The acquisition of Hewden Stuart by Finning Inc (Canada) instantly provided the plant hire group with an estimated 12 percent of the UK tool hire market.

St Gobain's Jewson currently holds third place in the market share table with Travis Perkins, A-Plant and Allen Group, all estimated to account for around 6-7 percent each. Brandon, Cox (Andrews Sykes) and GAP are estimated to account for a combined share of 6 percent in 2000. Vibroplant's rapid acquisitional activity has given the company a boost in the market share table to the end of 2000. During 1999, it was estimated that the company accounted for around 2-3 percent of sales , and this has now risen to an estimated 4 percent share.

Access Equipment remains a key sector within the market, currently accounting for 12 percent or around £82 million by value. Plumbing and pumping is the second largest sector within the market, and in particular saw an increase in demand during the second half of 2000 due to severe weather and the subsequent flooding. The sector is currently valued at around £68 million.

Lighting, Welding and Power and Heating, Cooling & Drying are also indicated to be performing well, with these sectors accounting for around 18 percent of the market. Sources indicate that the rise in demand for gardening and landscaping tools continues which now accounts for around £62 million of the total market.

Carpentry and Woodworking products account for around 7 percent of the tool hire market and are estimated to contribute just under £50 million at current hire prices. Cleaning and floor preparation tools and concreting and compacting remain unchanged in the product mix since 1999, currently contributing around 12 percent of the market by value.

The miscellaneous products sector encompasses a wide range of tools and equipment, and is currently valued at around £109 million, representing 16 percent of the market at hire prices. Success areas for 2000 include the heating and drying product sectors as well as plumbing, pumping and dehumidification products due to the flooding during the latter half of 2000.

The access equipment market has also performed well during 2000 in terms of volume although this success has been offset, to some extent, by continued pressure on prices. Continued emphasis on health and safety issues have also offered value growth opportunities in a wider range of safety products as well as stimulating demand for new products offering greater safety.

Text © 2001 AMA Research

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Last updated by Duncan Nottage 1st June 2001