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UK Construction Equipment Rental Market - Outlook and Forecast 2023-2029
The UK construction equipment rental market is projected to reach USD 5.57 billion by 2029, growing at a compound annual growth rate (CAGR) of 5.54% from USD 3.82 billion in 2022. The integration of digital transformation in rental companies in the UK is expected to drive the industry’s growth in 2023. Technologies such as IoT and AI play a crucial role in improving fleet management and reducing machine downtime by enabling quicker detection of machinery faults. Additionally, the UK government’s increased investment in infrastructure development projects, including affordable housing schemes and transit facilities, is anticipated to boost the demand for construction equipment rental. Furthermore, the government’s focus on expanding renewable energy capacity by 2030 is expected to drive the demand for material-handling equipment.
Among the different segments of the UK construction equipment rental market, the material handling segment holds the largest share, accounting for nearly 50%. Within the material handling category, aerial platforms are the most widely rented equipment. The growing logistics and warehouse industry, driven by investments in warehouse expansion projects, supports the demand for material handling equipment rentals.
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USD 3.8 billion in 2021
Type and End User
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To mitigate the negative impact of the COVID-19 pandemic, the UK government introduced the National Infrastructure Plan in 2021. This plan involved increased investments in roadway and railway infrastructure through programs such as the National Road Construction and National Railways. In 2022, the government further invested in modernizing the railway infrastructure. Affordable housing schemes and investments in transport infrastructure, including roadways and new railway lines, are expected to drive the demand for construction equipment rentals in the UK. Moreover, warehouse expansion projects and the growth of the logistics market due to increased consumer focus on online shopping post-pandemic are likely to drive the demand for forklifts and telehandlers in the UK construction equipment rental market.
In 2021, the UK government introduced an affordable housing delivery plan for Bristol City, targeting the construction of 1,000 new affordable housing units in 2024. This plan was an updated version of a previous housing delivery plan for 2017-2020. Additionally, the government planned to invest USD 4.8 billion over five years in affordable homes in London from 2021-2026. The housing sector in the country is expected to experience growth in 2023, with housing prices projected to decline by 10% according to a Savills report. Major housing projects, including modular home construction in Manchester, a regeneration project in Northern London Council, and the development of Notting Hill Genesis housing association, are underway in 2023.
The UK construction equipment rental market is expected to exhibit robust growth during the forecast period (2023-2029) due to increased government investments in housing, public infrastructure, and transport facilities. However, the government has faced challenges in meeting its annual housing targets, with only 216,000 housing units constructed between 2020 and 2021 out of the planned 300,000 units annually. Rising labor and building material costs have impacted housing projects across the country.
In 2022, the UK government increased investment in transport infrastructure in regions such as Cornwall, Greater Manchester, Newcastle, and Southampton to accelerate economic recovery post-pandemic. Renting construction equipment offers advantages such as avoiding high capital costs, costly maintenance, and access to new technology-equipped machinery.
The government’s national healthcare plan, which involves the construction and upgrading of new hospitals, is also expected to drive the UK construction equipment rental market. An investment of USD 4.3 billion is projected for constructing 40 hospitals by 2030. The government has implemented guidelines to standardize hospital design and promote modular construction methods for faster building programs. Additionally, USD 1 billion has been allocated to upgrade facilities in existing hospitals. The Health Infrastructure Plan (HIP), introduced in 2021, is a five-year program focused on investment in health infrastructure and the construction of new hospitals. The government also plans to invest over USD 2 billion in healthcare in the next four years.
To achieve zero-carbon emissions by 2050, the UK government has introduced new building regulations aimed at reducing carbon emissions from buildings and homes. Under these regulations, CO2 emissions from new homes must be approximately 30% lower than current standards, while emissions from other buildings, including offices and shops, must be reduced by 27%. The government emphasizes the installation of low-carbon technology such as solar panels and heat pumps to achieve this goal. In 2021, USD 6.6 billion was invested in installing low-carbon technology through the Social Housing Decarbonization Fund.
The UK construction market encountered significant challenges in 2022, including labor shortages and rising prices of building materials such as iron, steel, timber, and glass. Brexit-related changes in immigration laws in 2020 restricted labor migration from European countries to the UK, exacerbating the labor shortage in the industry. The shortage, combined with rising material costs, is expected to hinder infrastructure projects planned for post-pandemic economic recovery. Disruptions in the raw material supply chain, rising inflation, low labor availability due to an aging population, and a weak economy further limit the growth of the UK construction equipment rental market.
In 2022, UK fossil fuel prices experienced a sharp increase following OPEC’s reduction in oil production by 2 million barrels per day. Additionally, Russia’s invasion of Ukraine disrupted oil supply to European countries, including the UK, leading to a surge in petrol and diesel prices. According to government data, fuel prices in the UK rose by more than 27% in 2022.
The market is segmented based on various factors, including type and end user.
Segmentation by Type
Earthmoving Equipment – Excavator, Backhoe Loaders, Motor Graders, Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers)
Material Handling Equipment – Crane, Forklift & Telescopic Handlers, Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)
Road Construction Equipment – Road Rollers, Asphalt Pavers
Segmentation by End Users
Logistics & Warehouse
In 2022, earthmoving rental equipment constituted 34.5% of the entire construction equipment rental market in the UK. The segment for earthmoving rental equipment is projected to reach an estimated value of $1,978.3 million by 2029, with a compound annual growth rate (CAGR) of 5.97%. Within this segment, mini and crawler excavators accounted for over 70% of the market share in 2022. Earthmoving equipment plays a crucial role in repair and maintenance projects across diverse industries, including construction, mining, and renewable energy.
The use of rental construction equipment in the construction industry accounted for 47.5% of the overall market in 2022. It is anticipated that this application will grow to approximately $2,691.6 million by 2029, at a CAGR of 5.78%. Notably, in 2022, the UK government announced plans to invest $4.9 billion annually as part of the affordable housing scheme spanning from 2022 to 2032. This substantial investment aims to address the ongoing housing crisis. Approximately 65% of the total investment is specifically allocated to the building-for-rent initiative.
Prominent vendors in the UK construction equipment rental market include JCB, Caterpillar, Volvo Construction Equipment, Komatsu, Manitou, Hitachi Construction Machinery, Kubota, and Kobelco. Other notable vendors in the market are Liebherr, Hyundai Construction Equipment, Yanmar, and Liu Gong.
Among these vendors, JCB, Kubota, Caterpillar, and Volvo are the market leaders in the UK construction equipment rental market. They have established strong distribution networks and offer a wide range of products to cater to customer needs. JCB holds the strongest market share, while Kubota is a leader in mini excavators in the region.
Hitachi Construction Machinery, Komatsu, and Manitou are also making significant strides in the market. These companies are introducing innovative products to capture a larger share of the UK construction equipment rental market. For example, in 2022, Hitachi launched Z-axis excavators equipped with Stage V emission technology specifically for the UK market. Manitou group has introduced ultra-compact rough terrain telehandlers in the European market, targeting customers from the construction and agriculture industries.
Caterpillar, being a leading player in the market, has focused on promoting climate sustainability. In August 2021, they introduced battery-powered mining trucks as part of their efforts to support environmental initiatives in the industry.
Key Questions Answered
What is the value of the construction equipment rental market in the United Kingdom?
The United Kingdom’s construction equipment rental market was valued at USD 3.82 billion in 2022 and is projected to reach USD 5.57 billion by 2029.
What is the growth rate of the construction equipment rental market in the United Kingdom?
The construction equipment rental market in the United Kingdom is expected to grow at a compound annual growth rate (CAGR) of 5.54% from 2022 to 2029.
Which companies are prominent in the construction equipment rental market in the United Kingdom?
Prominent companies in the construction equipment rental market in the United Kingdom include Ashtead Group plc., Loxam, Boels Rental, GAP Hire Solutions, Flannery, Ainscough, and Stevens Equipment Rentals.
What are the key trends observed in the construction equipment rental market in the United Kingdom?
Key trends in the construction equipment rental market in the United Kingdom include the adoption of digital technology, the use of hydrotreated vegetable oil, and investments in building decarbonization.
Who are the major players in the construction equipment rental market in the United Kingdom?
Major players in the construction equipment rental market in the United Kingdom include Caterpillar, Komatsu, JCB, Volvo Construction Equipment, Hitachi Construction Machinery, Kubota, Manitou, and Kobelco.