THE IMPORTANCE OF PLANT HIRE
Since the CPA commissioned our colleagues at Oxford Economics to research and write this report into the size and scope of the UK’s plant-hire sector, it has provided us with an opportunity to look forward but also reflect on, what makes this sector so unique. It has showcased the people who work in it and the passion they bring to what they do. It shows why it is important we do more to raise the profile of plant-hire and celebrate its vital contribution to the wider construction sector.
This is the first fully comprehensive study of the UK’s plant-hire sector, and it makes a compelling read for both those employed in the sector, but also for policymakers and stakeholders – the people we are looking to influence and inform, about why it matters. It also helps put into perspective the breadth and scope of the sector and why it remains a key destination for highly skilled jobs and roles. From plant equipment operators, mechanics and logistical support to back-office roles and administration, the report shows that the sector only operates because of the people who work in it.
While the report is an opportunity to showcase the state of plant-hire, it also acts as a chance to review the progress made over recent years and the contribution our members make to the wider UK economy. Over the course of
the last few years, plant-hire businesses have had to navigate their way through a variety of potentially seismic issues, each of which have meant companies have had to adapt and evolve, in order to survive. The pandemic threw up a unique set of challenges and opportunities for plant-hire businesses, both in how to survive
the immediate shock, but also taking advantage of new technologies and ways of working. Our members played a vital role in the national effort to support the NHS and essential services, and it is something we look back on proudly.
The wider economic downturn showed the resilience and professionalism of the sector, with companies doing their best for their clients and customers, providing a first-class service, in challenging economic circumstances.
While recent years have been tough, companies have learnt the importance of drawing upon experience, communication, innovation, and planning for the future. Put simply, without the plant-hire sector, the construction sector itself cannot operate in its present form.
As we look to the future, it is one full of opportunities, growth, new technologies and innovations. Decarbonisation and the move to a net zero economy has been at the forefront of policymakers’ plans – it is important that our sector plays its part in this process, as the move away from diesel and fossil fuels gathers pace.
This, alongside the rise of AI and digitalisation, will all have a profound impact on plant-hire companies in the coming decades. Across this time, the role of the CPA will also change as we meet these future challenges and opportunities, working hand in hand with our members in supporting them, providing guidance, and standing up for them in the corridors of power.
This economic impact study helps set the foundations for moving forward for the CPA across every facet of our work and engagement and celebrating 90 years of supporting the UK’s construction plant-hire sector. It has only been possible because of the contribution our members have made to our continuing success.
THE IMPORTANCE OF PLANT HIRE
The construction sector is an important component of the UK economy, employing 7% of the UK workforce, and making activity in all other sectors of the economy possible through the infrastructure, offices, and factories that it builds.
However, an important enabling sector that sits behind construction and allows it to function in an efficient way is the construction plant- hire sector. From its beginnings during World War II, this sector includes all the companies that hire out construction plant and equipment to the construction firms carrying out building projects.
This report looks at the economic benefits the construction plant-hire sector brings to the UK. These benefits arise through three channels: the direct impact, which includes the impact of the companies themselves; the indirect impact, which occurs through the supply chain spending of these companies; and the induced benefits, which arise from workers in the sector and its supply chains spending their wages.
CONSTRUCTION PLANT-HIRE ACTIVITIES SUPPORT UK GDP
In this report we have estimated the size of the UK construction plant-hire sector at £10.5 billion in revenue in 2022. This includes the revenue of companies whose sole function is hiring out construction equipment, but it also includes the plant-hire revenues of larger firms that also offer other products and services.
From this revenue, we estimate the construction plant-hire sector directly contributed more than £6.4 billion to UK GDP in 2022. This is chiefly through the wages the sector pays its workers and the profits it generates.
The remainder of the revenue is used to purchase goods and services from the supply chain. We estimate the share of this spending that occurs in the UK helped to support a further indirect GDP contribution of £3.2 billion in 2022, across sectors such as construction and manufacturing.
THE IMPORTANCE OF PLANT HIRE
Lastly, we estimate a third impact on GDP, as the workers of the plant-hire sector and its supply chains spend their wages in the UK economy. We estimate this induced effect at more than £4.4 billion in 2022.
Altogether, this means the construction plant-hire sector is estimated to contribute a total of £14.0 billion to UK GDP in 2022. The total GDP impact is 2.18 times the direct impact alone. This means that for every £100 contributed to GDP directly
by construction plant-hire, the sector supports a total of £218 around the economy.
THE SECTOR ALSO CONTRIBUTES TO UK EMPLOYMENT
The construction plant-hire sector itself employed an estimated 88,600 workers in 2022. This includes those who actually work for plant-hire firms and operators hired in on a temporary basis.
These workers are estimated to be approximately 25% more productive than workers on average in the UK, with a higher share being company managers or directors than in the broader labour market, and also being marginally more qualified.
However, the sector’s employment impact goes beyond this. The supply chain activity supported by the sector and described above also supports an estimated 44,800 jobs around the economy. And lastly, the effect of workers spending their wages supported an estimated 58,200 jobs.
In total this means that we estimate the construction plant- hire sector supported a total of 191,5001 jobs in 2022. The total employment impact is 2.16 times the direct impact alone. This means that for every 100 people directly employed by construction plant-hire, the sector supports a total of 216 jobs around the economy.
