HIRE MARKET

• Market definition in terms of type of outlets and range of products.
• Market size in value terms, 1991-1998 and forecasts up to 2003.
• Market trends during the 1990's - decline in early 1990's leading up to recovery in 1997/98. Factors influencing market development (Construction activity, hire rates, new specialist products, purchase or hire, privatisation of utilities, local government, railway infrastructure, etc).
• Future prospects for hire market - impact of construction activity, new product ranges, product development targeted at hire market, new market entrants, diversification into tool hire etc.

PLANT HIRE COMPANIES

• Total volume of outlets - Multiple branch companies, Specialists, Small Hire Companies.
• Market shares of major plant hire companies - growing rationalisation of industry, increasing shares through acquisitions and organic growth, diversification/specialisation.
• 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.
• 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.
• Major suppliers by product group.

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.

The Plant Hire market is a mature industry sector, but continues to experience substantial changes in terms of product range, customer base and market structure. Estimates of market size vary widely, based on different market and product definitions, with our estimate of £2.16 billion in 1998.

Following several difficult years in the depths of the construction industry recession in the early-1990s, the plant hire sector experienced a more buoyant period in 1997/98. The construction industry was slow to recover from the recession, but has steadily grown in the last 3 years based on more buoyant demand across most sectors of the industry.

Housing, retail developments and the public sector have generally been relatively stable, while commercial, utilities, railways and general infrastructure projects have finally begun to accelerate since 1997. Millennium-based projects have also provided a major impetus to construction output, and plant hire in particular.

In addition to the general recovery in the construction industry, hiring of plant has gained in popularity for several key reasons. Contractors are increasingly reluctant to commit capital investment on plant, while problems of repair, maintenance and storage become the responsibility of the hire company. Equally, contractors can be more flexible in terms of hiring specific equipment to meet different site requirements and take advantage of new equipment quickly.

Earth-moving equipment is the largest product sector, estimated to account for 47 percent of the plant hire market. Lifting equipment, including cranes, material handling and powered access, accounts for an estimated 29 percent, with general construction, road-making and compressors/generators each typically accounting for around 5-7 percent of hire turnover.

Powered access has been the key growth area over the last 3 years, reflecting changing safety standards relating to working at height. Several major hire organisations have invested heavily in their access equipment fleets, with some leading operations such as Hewden and A-Plant establishing separate access divisions.

Product development focus for equipment suppliers is based on several key issues. Product reliability to reduce downturn, growth of compact equipment for use in restricted spaces, and improved safety features are major areas of development applicable to many product sectors.

In terms of the supply structure, the plant hire industry remains highly fragmented, with around 2500 outlets operating in the sector. Hewden Stuart are regarded as market leaders, with around 7 percent share, while Initial, Finning, Ashtead, Andrews Sykes etc, are also leading suppliers with shares typically in the 3-5 percent range.

The industry is beginning to rationalise and is likely to do so at an accelerating pace. It is becoming increasingly difficult for small independents to update their fleets and compete effectively with national operations. Equally, large-scale customers are establishing longer-term contracts and are looking to create links with hire organisations which can offer nationwide supply.

The medium term prospects for the industry are relatively optimistic. While the outlook for the economy in 1999 appears uncertain, Millennium-based projects are providing some attractive opportunities for hire. Beyond the Millennium, major refurbishment and investment programmes from railways, power generation, water, health and education should ensure reasonably buoyant conditions for hire, providing there is no major recession in the short term. Housing and commercial construction activity should also be relatively stable environments, which combined could result in underlying annual growth rates of 3-4 percent in the medium term.