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AM71011

AMA PLANT HIRE MARKET FEBRUARY 2001

Overview

This report covers: Cranes, Powered Access, Material Handling,Excavators, Loading Shovels, Dump Trucks, Concrete Mixers, Pumps, Crushers, Rollers, Planers, Pavers, Environmental (Heating, Cooling, Drying, etc.), Portable Accommodation, Tools, MEWP

Companies covered include: Hewden Stuart, Finning, Ashtead, Andrews Sykes

Key Areas

Table of Contents

Executive Summary

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KEY AREAS

AMA Research have published the Second Edition of the ‘UK Plant Hire Market Report’. Incorporating original input and primary research, the report represents a comprehensive and up-to-date review of this changing and complex market, with particular emphasis on the following:

• PLANT HIRE MARKET - Size, Structure, Trends, Forecasts.
• HIRE COMPANIES - National, Regional, Local, Specialists, Tool Hire.
• ANALYSIS BY PRODUCT GROUP:-

• LIFTING - Cranes, Powered Access, Material Handling etc.
• EARTH-MOVING - Excavators, Loading Shovels, Dump Trucks, etc.
• CONSTRUCTION - Concrete Mixers, Pumps, Crushers etc.
• ROAD-MAKING – Rollers, Planers, Pavers, etc.
• COMPRESSORS/GENERATORS
• OTHERS - Environmental (Heating, Cooling, Drying,etc.), Portable Accommodation, Tools etc.

The Plant Hire market continues to experience major change at present with a combination of underlying 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.

The report reviews the general range of equipment offered by most Plant Hire outlets, but specifically excludes tool and general equipment hire, which is reviewed in our ‘UK Tool Hire Market Report 2000’.

The Report Content Includes:-

HIRE MARKET

• Market definition in terms of type of outlets and range of products.
• Market size in value terms, 1991-2000 and forecasts up to 2005.
• Market trends during the 1990's. Factors influencing market development (Construction activity, new specialist products, purchase or hire, privatisation of utilities, infrastructure developments, etc).
• Future prospects for hire market - impact of construction activity, new product ranges, product development targeted at hire market, new market entrants etc. Impact of competitive hire rates.

PLANT HIRE COMPANIES

• Number of outlets – major players, key trends etc.
• Market shares of major plant hire companies - growing rationalisation of industry, increasing shares through acquisitions and organic growth.
• Review of major national hire companies and larger regional operators - turnover, branches, areas of specialisation etc.
• Competitive structure - major hire companies, overlap with tool hire market, shares of major tool hire companies.

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 plant hire market.
• Buying and Specification process - decision-making process for purchasing equipment, key influences, health and safety issues, pricing, replacement cycles.
• Major equipment/machinery suppliers by product group.

FUTURE PROSPECTS/HOUSING/CONSTRUCTION

• Construction and engineering trends; legislation; prefabrication.
• Future developments, implications for suppliers.
• Economic influences, future growth prospects for the plant hire market

The report contains over 80 pages and 20 tables and charts of ORIGINAL research and comment on the UK Plant Hire Industry and provides incisive and thought provoking views on the industry’s development.

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EXECUTIVE SUMMARY

In the 2 years under review since our last report, the UK Plant Hire Market has experienced a period of change and restructuring, reflected in liquidations, disposals, acquisitions, industry concentration and new entrants.

In 2000, the UK Plant Hire market is estimated to be worth some £2.26 billion, with the chart below indicating the development of the market between 1995 and 2005:

Source: AMA Research/Trade Estimates/ONS

Following several difficult years in the depths of the construction industry recession in the early 1990’s, many sectors of plant hire experienced a more buoyant period from 1996.

However, 1999-2000 marked a period of overcapacity and low hire rates in a number of sectors, particularly in mobile elevating work platforms, mobile cranes, backhoe loaders, rollers etc, with the plant hire market demonstrating only marginal growth in overall terms.

Earth-moving equipment is the largest product sector, estimated to account for 47 percent of the plant hire market. Lifting equipment, including materials handlers, cranes, and powered access accounts for an estimated 29 percent, while general construction, road making, compressors and generators, each account for around 5-7 percent of hire market value.

Powered access has been one of the key growth areas, although 1999-2000 marked a period of oversupply and a downturn in demand due to rapid fleet building by major rental companies not being matched by end-user demand. However, conditions are marginally improving and trade sources have expressed confidence in a return to growth. Some growth has occurred in tower crane hire, and in generating set hire, while pumps have benefited from temporary surges in demand due to flooding problems in late 2000, in addition to water and sewage refurbishment, etc.

Since our last report, product development demonstrates increasing focus on improving engine efficiencies and reducing noise levels. Certain developments are targeted at increasing productivity and utilisation in specific machine types – for example, combined materials handlers and work platforms – and the extension of the ‘compact’ principle to a wider range of plant including dump trucks, crushers, cranes, etc.

In terms of the supply structure, the plant hire industry continues to remain relatively fragmented, although the last two years have seen increasing restructuring with acquisitions, rationalisation, and some market concentration.

Hewden Stuart are regarded as the market leaders with a 7 percent share, followed by Finning, Ashtead, Andrews Sykes, etc. with shares in the 2-5 percent range. However, with the recent take over of Hewden Stuart, Finning will become the market leader with the largest share of the UK plant hire market approaching an estimated 12 percent.

In terms of the number of outlets, there are estimated to be in the region of 2000 to 2500 in the UK, reflecting a degree of rationalisation since the publication of our last report. Further rationalisation of outlets is anticipated, to avoid duplication of overheads where branches are in close proximity.

Future prospects for the plant hire industry tend to vary between sectors but are generally regarded to be optimistic, buoyed by increasing levels of construction orders, including health and education, an improving manufacturing and engineering sector, and the impact of recycling and health and safety issues.

Increasing investment in infrastructure including roads, railways, water and sewerage should benefit many sectors of the plant hire market. Another positive influence is the trend towards increasingly stringent safety and machinery standards/regulations, with an underlying trend towards mechanised lifting equipment such as cranes, MEWP’s, materials handlers, etc.

An indication of the growing trend to increasingly demanding health and safety standards is reflected in a recent ministerial announcement concerning proposed legislation, scheduled for introduction after the general election, to compel employers to improve safety at work. It is understood that the new bill is being introduced in response to criticism of the safety culture in the railway system and in the building industry, which has particular relevance for the plant hire market. This, of course, is a relatively long-term development, but one which will reinforce the continuing trend to tighter standards.

Underlying trends which benefit plant hire include privatisation, the growth of facilities management, the continuation of outsourcing and subcontracting of maintenance operations.

Additionally, there are several other specialist factors impacting positively in the longer term on the plant hire market. Trends to prefabricated building construction provide opportunities for crawler cranes and MEWP’s, whilst data network infrastructure/uninterruptible power supplies/mobile telephones provide opportunities for generating sets and general construction plant. Additionally, a growing products distribution market (largely driven by e-commerce) benefits forklifts, and the need for oil free compressed air in process industries has favourable implications for compressors.

In view of the above comments, annual growth rates of 3-4 percent are forecast for the overall plant hire market for 2001-2005, bearing in mind that certain sectors will perform better than others.

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TABLE OF CONTENTS

Text © 2001 AMA Research

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Last updated by Jacob van Eldik 28th February 2001