Significant improvement in UK construction equipment productivity

By Helen Wright10 June 2014

Productivity in the UK construction equipment industry has improved "significantly" since the 2009 recession, with estimated revenues from the sector reaching £11 billion (€13.6 billion) for 2012/13, according to the UK Construction Equipment Association (CEA).

The figure came from a new Construction Equipment Sector Report, commissioned by the CEA with support from the UK Department for Business, Innovation & Skills; as well as consultancies Off-Highway Research and Knibb, Gormezano & Partners.

Consisting of a core of almost 1,500 companies, over 40,000 people were employed in the UK construction equipment industry last year, according to the report, with up to 10,000 more in related third party companies.

It said the industry invested around £200 million (€248 million) year in research and development, and produced approximately 50,000 units a year, of which 60% were exported.

Alex Woodrow, managing director of Knibb, Gormezano & Partners, said the report revealed a generally positive outlook from the industry.

"Most businesses saw a drop in demand from 2008 to 2010, and laid off staff," he said. "From 2012, most of the supply chain struggled to make up the deficits from plant closures and staff layoffs, but by 2014, supply was back to normal. Productivity has increased significantly - revenue growth has exceeded employment growth.

"New product development and innovation continued throughout the recession, with OEMs working to meet stringent emissions legislation. Suppliers have also optimised their supply chains and entered new markets."

However, while it has emerged from the recession, the UK's construction equipment sector still faces a range of threats and challenges, according to Woodrow.

"The competitiveness of UK industry compared to less regulated markets needs to be maintained and supported," he said, adding, "The UK industry also includes various OEMs, but only one of these - JCB - is UK-owned, which leaves the industry vulnerable to the influence of overseas decision-makers."

The report was presented for the first time at the CEA AGM, and will be available from the CEA shortly.

Nigel Baseley, the new president of the CEA and marketing director of engine firm Perkins, said the report would prove to be an important document to inform the association's future direction.

"If you cannot talk confidently about the size, breadth and depth of the industry you cannot influence people," he added.

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