Report forecasts slow UK rental recovery
By Murray Pollok01 March 2010
A new report into the UK's plant hire market forecasts a 6% fall in revenues in 2010 to follow the almost 22% drop last year, with a very slow recovery starting in 2011.
The report forecasts that revenues in 2014 will still be more than 20% down on the market peak of 2007.
The report by AMA Research said plant hire revenues in 2009 were £2.18 million, down 21.6% on the £2.79 billion for 2008.
AMA forecasts that revenues will recover by a nominal 1% in 2011 with increases of between 2% and 4% in the subsequent three years, with the market size reaching £2.26 billion in 2014.
AMA defines plant hire broadly, including earthmoving, lifting, pumping/crushing/screening, road making, compressors/generators/lighting and portable accommodation/temperature control and general equipment.
"Following steady growth to 2007, the plant hire market felt the impact of the downturn in the economic climate in 2008, deteriorating further in 2009 to an estimated size of £2.18 billion", said AMA.
"Whilst 2010 is expected to be another tough year for the sector, the market is expected to begin recovery in 2011 in line with key-end use markets.
"The scale of the downturn is reflected in the major rationalisation programmes implemented by the hire groups in the last 18 months to reduce borrowings, protect margins and position themselves for market recovery."
AMA said many sectors of the market, such as earthmoving and lifting, have been adversely impacted by the cancellation or postponement of major projects, while road equipment and some access products have been less impacted by the downturn; "Equally, utilities, transport and the Olympics infrastructure continue to offer some opportunities."
"Given the severe downturn in 2007-09, the short term prospects for 2010 indicate further decline - though at a slower rate of around 5-7% - with fortunes turning more positive in 2011-2012", said AMA Research,
"The scale of the downturn is reflected in the major rationalisation programmes implemented by the hire groups in the last 18 months to reduce borrowings, protect margins and position themselves for market recovery.
The report, Plant Hire Market - UK 2010, costs £650 and can be ordered online at www.amaresearch.co.uk or by calling +44 (0)871 3103450.