Report reveals economic impact of equipment rental in UK

From left to right: Co-host Merryn Myatt, CPA policy manager Chris Cassley, Oxford Economics lead economist Jamie Charles and co-host Peter Haddock. Photo: CPA

A new report published by the Construction Plant-hire Association (CPA) has revealed the economic impact of the plant-hire sector on the UK economy.

The report, produced alongside financial analysts Oxford Economics, analyses the direct, indirect and induced impact of the sector in a number of areas.

It revealed that the sector contributed some £14 billion Gross Value Added (GVA) to the UK economy in 2022.

It said that UK firms accounted for £10.5 billion in revenue for the same period, supporting a direct contribution of £6.4 billion to UK GDP via employee wages, salaries, business profits and taxes on production.

The report states that for every £100 contributed to GDP directly by construction plant-hire, the sector supports a total of £218 around the economy

At the same time, the report said that its indirect contribution to the economy was roughly £3.2 billion, which was generated by supply chain spending on new equipment, fuel, office supplies and external services such as legal and accounting. 

In terms of employment, research from Oxford Economics found that for every 100 people directly employed by construction plant-hire, the sector supports a total of 216 jobs around the economy. 

The sector employed an estimated 88,600 workers in 2022, with those found to be 25% more productive than the UK average, while it also estimates that the sector indirectly accounted for 44,800 jobs through supply chain purchases, most notably in manufacturing (9,600), administrative ourchases (7,700) and retail & wholesale (7,200).

Additionally, workers employed by plant-hire companies were said to have contributed £4.4 billion through wage spending on real estate (£1.1 billion), retail & wholesale (£650 million) and financial services (£405 million).

In turn, wage spend by plant-hire companies are said to support a further 58,200 jobs, meaning it has an estimated employment contribution of 191,500 as of 2022. 

Chris Cassley, policy manager, CPA, told IRN that the report demonstrates the productivity within the sector; “For a number of years we’ve not explored what the true value of the plant-hire sector in the UK is. Fundementally we estimated it to be around £4.5 maybe £5 billion but we wanted some proper analysis done.

“We can then use this as a tool when it comes to speaking with government or to other construction trade associations. We can also use it as a promotional tool to talk about the sector more widely, to demonstrate how big it is and how many jobs there are and what it means to the UK economy.”

Jamie Charles, lead economist, Oxford Economics, added, “I was surprised about the scale of the sector. Obviously these numbers speak for themselves, but there are other ways we can quantify this as well. 

“In a broader view, the plant-hire sector is about 3.6% of the construction sector as a whole in the UK. That’s about double the average in the EU and shows that the sector is really well developed and is the backbone of the construction sector in the UK, where it’s not quite the same in Europe.”

Speaking before the report was published at its annual Conference, CPA chief executive Steve Mulholland, said while the plant-hire sector in the UK faces challenges such as the energy transition, he said it is a sector that is full of opportunities. 

Mulholland said the report also offers a chance for the sector to review its progress in a number of key areas of interest, including its utilisation of technology such as AI.