AM71014

AMA RESEARCH Market Report : UK Plant Hire : August 2004

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Introduction and Overview

AMA Research have published the Fourth Edition of the ‘Plant Hire Market – UK 2004’. Incorporating original input and primary research, the report represents an informed and up-to-date and detailed review of the market and offers excellent value for money.

Key sectors covered in the report include:

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 report reviews developments within the industry, with emphasis on qualitative and quantitative market assessment – both essential requirements for good marketing planning. Recent trends, key influencing factors and forecasts of future developments are assessed.

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 2004’.

The Report Content Includes:-

HIRE MARKET

Market definition in terms of type of outlets and range of products.

Market size in value terms, 1996-2003 and forecasts up to 2007.

Historical and current market trends. Factors influencing market development (levels of construction activity, new specialist products, 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 concentration of the 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.

Major equipment/machinery suppliers by hire sector product group.

FUTURE PROSPECTS/HOUSING/CONSTRUCTION

Construction and manufacturing trends; waste; cladding; pre-fabricated buildings; self build house building; legislation; wind turbines, etc.

Future developments, implications for plant hire companies.

Economic influences, future growth prospects for the plant hire market

Executive Summary

The UK Plant Hire Market is currently experiencing a period of adverse trading conditions including change, restructuring, reorganisations, divestments, acquisitions, and industry concentration.  In 2002, the UK Plant Hire market is estimated to be worth some £2.32 billion.

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 between 1996 and 1999. In particular, the mobile platform sector grew rapidly fuelled by expanding rental demand as privatisation and outsourcing gathered momentum.

However, 1999-2002 marks a period of overcapacity and low hire rates in a number of sectors particularly in mobile elevating work platforms and mobile cranes, with the plant hire market demonstrating flat or marginal growth in overall terms. In addition, site access restrictions arising from the incidence of foot and mouth disease impacted adversely on construction and outdoor events, although the pump hire sector, driers and generating sets received motivation from flooding in 2000-2001.

Earth-moving equipment is the largest product sector, estimated to account for 47% of the plant hire market. Lifting equipment, including materials handlers, cranes, and powered access accounts for an estimated 29%, while general construction, road making, compressors and generators, each account for around 5-7% of hire market value. In general terms, very few of these sectors currently demonstrate significant short-term growth trends, with the exception of portable accommodation, recycling and roads-related hire, although certain more specialist sub-sectors may become more active in the medium to long term - for instance site and rental power.

Levels of increasing activity are also forecast for road railers, skid steer loaders, and the 'renewables' sector, including offshore wind farms, and, in the very long term, biomass fuels for power generation, with motivation for crawler cranes and wheeled loaders respectively. The strong regional influence of the level of concentration of industry including the location of forestry and aggregates extraction, and private investment programmes in construction and housing should not be overlooked due to the resultant varying impact on plant hire companies throughout the UK.

Symptomatic of the current state of the plant hire market is the disposal of Maxxiom's plant interests, and, in the cranes sector, the entry into administrative receivership of Baldwin's Industrial Services, and the disposal of Hewden Stuart's tower crane operation. In addition, GE Capital Equipment Services divested their heavy plant division whilst Mitie disposed of their mobile platform business. Considered in total, all these events tend to indicate that the real rate of return on investment in certain sectors of the plant hire market is insufficiently attractive to sustain long term profitable growth for some companies.

It should be added that, in addition to difficult trading conditions in many sectors, plant hire companies have also had to contend with shortages of qualified drivers and fitters, the rising cost of health and safety and pollution legislation, and substantial increases in insurance premiums reflecting factors such as the rising incidence of employers' liability claims, plant theft, asbestos litigation, and the financial implications of the total demise of an insurance company servicing the construction and plant sectors.

All the above factors are included in order to present a fair assessment of the true conditions under which plant hire companies are actually operating with implications for the overall climate for market development which, in concert with weak demand and over capacity in certain sectors has tended to result in relatively flat market conditions.

Hewden Stuart are regarded as the market leaders with an 8% share, followed by Finning, Ashtead, Ainscough and Baldwins. Finning now own Hewden Stuart and the group are clear market leaders in the UK.

In terms of the number of outlets, there are estimated to be in the region of 2000 to 2500 in the UK. Further rationalisation of outlets is anticipated, to avoid duplication of overheads where branches are in close proximity, reflecting trends towards higher levels of industry concentration in the short, medium and long term.

Since our last report, product development continues to focus on improving engine efficiencies and reducing noise levels, emissions and pollution. Certain innovative developments are targeted at increasing productivity and utilisation in specific machine types - for example, combined materials handlers and work platforms, hydraulic cladding attachments for scissor lifts, dual transmission and driving systems for skid steer loaders, and an expanding range of machine attachments.

Future prospects for the plant hire industry tend to vary between sectors but are generally regarded to be positive motivated by increasing levels of construction orders, particularly health and education, and the impact of increasing investment in infrastructure, including roads, railways, water and sewerage which should benefit many sectors of the plant hire market. Another positive influence is the trend towards recycling. As mentioned previously, further underlying trends which benefit plant hire include privatisation, the growth of facilities management, the continuation of outsourcing and subcontracting of maintenance operations.

In view of the above comments, annual growth rates of 1-2% are forecast for the overall plant hire market for 2003-2006, bearing in mind that certain sectors will perform better than others.

Companies Mentioned

Finning International Inc, Hewden Stuart Plc, Finning International Inc, P.C. Harrington., Maxxiom, A-Plant (Ashtead), Ainscough Group, Andrews Sykes, Baldwins Industrial Services, Loadtite, Phillips Crane and Rigging, Baldwins, Industrial Services Inc, Aggreko Plc, Longville Group, Gap Group Ltd, Hydrex Group, AMPL, Pochin's Plc, Putzmeister's, GE Capital Equipment Services, GE Energy Rentals, Dudley Vale, Selwood Group, Jarvie Plant, Clive Barford, H.E. Services, Alpha Plant, Ascus, LCH Generators, BCL Rail Services, BCL Plant Hire., Philmor Rail, Nationwide Access, Skylift (Nationwide), Loxam, Universal Aerial Work Platforms, SGB, EPL Access, Aerials for Industry, Independent Access Supplies, Lex Harvey, SGB Group, Harsco Corporation, SGB Scafform, Mast climbers, The Turner Group, Turner Access, Upright, Aerial, Elliott Hire, Caledonian Safemaker, Hydrainer, Weldex, BP's System Vanellus, Global Telematics, Sennebogen, New Holland Construction's, Alpha Plant's, Caterpillar, Terex, Case, JCB, Volvo, Bell Equipment, Greyhound Plant Services, JCB, Thwaites, Hydrema, Ace Plant, McCormick, Harsco Track Technologies, Liebherr, Hitachi, Daewoo, Komatsu, Philmor Rail, Basket, Niftylift, Hydrex, Rail Services, Story Rail, Case, Daewoo, Caterpillar, Hitachi, Marubeni-Komatsu, Liebherr, Orenstein, Koppel, Kubota, Hyundai, Hydrema, Schaeff, (Terex), Moxy, Terex, Bobcat, Barford Construction, Benford, Bell Equipment, Thwaites, Takeuchi, Finning, Lex Harvey, Hyster, Linde, Hewden Stuart, UK Forks, Keybemo's, Ainscough, Liebherr, Manitowoc, Grove, Terex, Vanson Cranes, Kobelco, Sparrow Crane Hire,, SLD/Longville, Andrews Sykes, Selwood, Hydrainer, Putzmeister, Ultranazz, Schwing, Liebherr, Godwin, Grindex, ITT Flygt, Ingersoll, Dresser, KSB, Powersceen, BL Pegson,Finlay, Hydrascreens, Metso Minerals, Bomag, Metso Minerals, Benford, Barford International, Hamm, Caterpillar, Metso Minerals, Wacker, Errut, Rammax, Ammann, Genie Industries, Generator, Power/SGB Rovacabin's, Atlas Copco, Compare, Ingersoll-Rand, Kaesar, F G Wilson Engineering, Caterpillar, TT Group, Cummins, Lister Petter, Brook Thompson, Genset, SIP, SDMO, Portakabin, Rollalong, Rovacabin, S. Wernick, Terrapin, Britspace, Wraith Accommodation, R.B. Farquhar, Garick, Caledonian Safemaker, De Longhi, Andrews Sykes, Carrier, Heatbusters, Acna, Youngman.

List of Contents

1	INTRODUCTION
2	SUMMARY
3	ECONOMIC BACKGROUND
3.1	GDP
3.2	INFLATION & INTEREST RATES
3.3	UNEMPLOYMENT
3.4	HOUSEHOLD CONSUMPTION
3.5	HOUSING & CONSTRUCTION
3.6	CONCLUSIONS
4	PLANT HIRE MARKET
4.1	DEFINITION
4.2	MARKET STRUCTURE
4.3	MARKET SIZE
4.3.1	Market Background
4.3.2	Future Prospects
5	PLANT HIRE COMPANIES
5.1	MARKET STRUCTURE
6	PRODUCTS
6.1	PRODUCT MIX
6.2	PRODUCT TRENDS
6.2.1	Earth Moving Equipment
6.2.2	Lifting Plant
6.2.3	Construction
6.2.4	Road-Making Equipment
6.2.5	Compressors/Generators/Lighting/Welding
6.2.6	Others/Non-Mechanical Plant
7	KEY MARKET INFLUENCES
7.1	UK ECONOMY
7.2	CONSTRUCTION:CONTRACTORS OUTPUT
7.3	MANUFACTURING OUTPUT
7.4	SELF-BUILD MARKET
7.5	PREFABRICATED BUILDINGS
7.6	CLADDING
7.7	WASTE
7.8	LEGISLATION
7.8.1	The Aggregates Tax
7.8.2	Health & Safety, etc.
7.9	WIND TURBINES
7.1	RAILWAY SECTOR
8	FUTURE PROSPECTS

Tables and Charts

Text © 2004 AMA Research

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Last updated by Amanda Porteous 2004