Key factors driving construction machinery rental growth in the UK and Europe

Comparing the machinery rental markets

The construction equipment rental industry is growing in both the European and UK markets. According to the European Rental Association Market Report 2023, among the reasons behind this growth are high machinery purchase prices and economic uncertainty, which are shifting demand away from ownership in favour of usership. The European rental market was expected to outperform the construction sector in 2025, with a forecasted 4.6% growth in turnover and total turnover of 31.891 billion euros.

In the UK, the ERA forecasted turnover of £6.986 billion for 2024 and £7.298 billion in 2025. However, the rate of growth of UK equipment rental turnover has been slowing in recent years – from 7.8% in 2022, to 3.4% in 2023, and an expected 2.7% in 2024. This has been attributed to weaker economic conditions and higher borrowing costs, which have been holding back construction activity.

Global changes affecting the industry

Residential construction projects have been affected by high mortgage rates and inflation squeezing household incomes. Meanwhile, non-residential construction has also declined amid economic uncertainty, high construction costs and long-term structural changes.

A slowdown in office construction is also due to the shift towards remote and hybrid working, which has reduced demand for traditional office spaces. Nevertheless, industry sources claim that the technology and R&D sectors are driving demand for modern, high-spec sites to be built.

National infrastructure projects, including road upgrades, railway developments, green energy installations and logistics hubs are helping to sustain demand in the UK market – although spending in this segment has also been affected by delays to major projects.

An established and mature market

Construction equipment hire in the UK is considered a more established and mature sector than its European neighbours. Industry association statistics support this – the UK’s Construction Plant-Hire Association (CPA) represents 1,900 companies in the UK, while the continent-wide European Rental Association represents approximately 5,000, which includes the UK companies.

The history of construction plant hire in the UK dates to WW2, when the British Government had taken ownership of considerable quantities of construction machinery, and controlled both hiring rates and who could purchase new equipment. The post-war years saw the formation of plant-hire companies that have been important to the construction industry ever since, saving the construction firms that were rebuilding Britain from the need to purchase capital equipment.

A demanding and fast paced environment

The dynamics of the UK rental market also differ significantly to the rest of mainland Europe, according to COO of Synergy Hire and CPA Council Member Garry Orr. “The UK market is very demanding and fast paced, where Europe does not have the same ‘just-in-time’ method of working.

“With time restraints, lack of site planning or foresight into site requirements, this often leads to last-minute orders for next-day deliveries. Companies in Europe that we converse with are always commenting on how that just would not work in Europe, where most machinery requirements are placed well in advance.”