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Press Release: UK Plant & Tool Hire Market Development Report

Released: November 2010

After researching the UK plant & tool hire market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2006-2010:

In 2010, the UK market for plant and tool hire is projected to contract by 2% in nominal terms to £4001 million. This consolidates declines of 2% and a strong 16% recorded in 2008 and 2009 respectively. Prior to that, the market demonstrated growth, increasing by 6% and 7% in 2006 and 2007 respectively. The downward trend evident since 2008, is largely a reflection of the significant downturn in new construction activity, in particular in the private housing and commercial sectors, as a result of the economic and financial crisis. Furthermore, profit margins have been squeezed as intensified price competition has put hire rates under increased pressure. However a stronger decline is believed to have been avoided, partly due to increased government spending on public build projects, mainly in 2009. Some demand for plant & toll hire was also maintained in civil engineering the repair & maintenance sectors during the economic downturn.

Prior to the economic downturn, demand for plant and tool hire increased, largely driven by a buoyant construction market. A move towards hire and away from ownership reflecting the impact of health and safety and energy efficiency legislation has also exerted a positive effect on the market. Demand for plant and tool hire is closely linked to output levels in the overall construction industry as well as to civil engineering and repair & maintenance activity, thus the market follows a similar development to overall construction output.

Market Forecast 2011-2015:

The UK market for plant and tool hire is anticipated to increase in value in each year up to 2015. In 2011, demand is anticipated to increase by a moderate 1% in real terms. This is forecast to be followed by slightly stronger growth in the following four years, with annual growth levels expected to fluctuate between 2% and 5%. In 2015, the value of the market is anticipated to reach £4634 million (at 2010 prices), representing overall growth of 16% in real terms compared with the current year.

The only modest increase projected for 2011, is largely a reflection of the continued uncertain outlook in the construction sector, with output levels anticipated to remain subdued, at least in the short-term. Furthermore, impending public spending cuts also raise the level of uncertainty concerning future demand for plant & tool hire in the public sector. Indeed, market growth over the next five is anticipated to be largely driven by a recovery in the private construction sector. However, despite growth projected for the private construction sector, output is anticipated to remain below the levels seen prior to the downturn. Demand is also anticipated to be generated from civil engineering projects, with the utilities and renewable energy generation sectors showing the strongest growth potential. However demand in other civil engineering sectors, which are dependent on government spending, such as roads, is likely to be subdued over the next five years.

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MBD specialises in business to business market research. The range of reports and industries in which we operate in is constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

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