The market
for diesel generator hire, which according to AMA’s definition excludes
ancillary products, has performed well in recent years, having experienced
growth of 29% from 2014. Over this period, the market has benefitted from
increasing demand across most many application areas including construction,
events, infrastructure and industrial. Other drivers include rising power
demand in several sectors, such as events and industrial, as well as ‘critical’
applications requiring more secure back-up support.
The generator hire market is part of the larger construction equipment rental market
that includes products typically hired out by plant and tool hire companies,
such as earth moving, lifting, pumping, road-making, power and tools. It is
estimated that the generator hire market accounts for only around 2% of the
overall construction equipment rental market.
Opportunities
in the generator hire market range from very large and infrequent situations to
very small & recurring events. High value, one off sources of demand
include major entertainment events and natural disasters; whilst other
application areas include temporary construction usage and the need for power
while a company’s own equipment is repaired.
Construction
is a key end-use sector, and accounts for around one third of the market.
Generators are required in a number of applications, such as for powering site
cabins and welfare facilities, as well as powering pumps, lighting, crushing
plant, tower cranes and tools & equipment etc. Generators are often one of
the first pieces of equipment to arrive on site and the last to leave.
The
industrial sector is the largest non-construction sector and the second largest
overall, with demand driven by sectors such as manufacturing, refining &
processing, recycling & waste, and data centres. Infrastructure and events
are also important sectors for generator hire, each accounting for a
significant share of the market. Further demand comes from the public sector as
well other sectors including extractive, agriculture, commercial, retail and
landscaping.
By volume,
generators with a rating of 21-350kVA hold the largest share and account for
close to half of the market, with generators up to 20 kVA having the second
largest share at around a third of the market. The former are typically used in
construction and events as well as in small offices, industrial units or
hospital departments.
In terms of
distribution, the market continues to be dominated by large, national
multi-branch organisations that have expanded through a combination of organic
growth and acquisition. In addition, a wider range of outlets including
builders’ merchants, DIY multiples and garden stores now offer a hire service. Generator
hire is also offered by both plant hire and tool hire companies, with the
former focusing on larger generators with a higher generator rating and the
latter focusing on smaller generators, typically up to around 20-25 kVA.
Specialists can offer generators with a wider range of power ratings, up to
around 2,000 kVA.
Prospects
for the generator hire market into the medium-term remain relatively optimistic
with the market forecast to experience annual growth rates of 4-5% following a
slightly smaller increase of 2% in 2018. Going forward, construction sectors
likely to be the main drivers of growth in the next 3-4 years are housing,
infrastructure and entertainment & leisure.
The effect
of the ‘Brexit’ negotiations on levels of confidence and investment remains the
biggest risk factor to business confidence, which, if it falls further will
have a direct effect on project starts. Additionally, any slowdown in
non-construction activities, such as manufacturing or events, will negatively
impact market value.
The ‘Generator Hire Market Report - UK
2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk
or by calling 01242 235724.
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