Like most industries, the UK plant hire sector also suffered due to the pandemic. The stock market dropped by 31%, and every company had to bear the loss.
Opportunities and Challenges Faced by the Plant Hire Sector During the Pandemic
However, compared to previous economic crises, the impact was survivable, which means that these services are considered essential. And since the interconnected construction industry fuels various providers, equipment rentals are in a good position now and for the years to come.
Plant hire services are an essential sector
The UK’s infrastructure industry had to remain open during the pandemic to ensure an efficient response to the public. Plant hire Birmingham companies are at the forefront of providing the equipment and other materials necessary to keep the projects and maintenance works running. But despite this, there are still challenges resulting from the pandemic that resulted in operational concerns.
Moving forward, there will be firms that will survive and win over the crisis, but they have to expect the worst first. Luckily, 2021 is right around the corner, and many seem optimistic about what’s to come. Unfortunately, there are also those who will lose because of the lockdowns. For example, smaller equipment rental companies without the necessary resources to keep their business afloat had to shut down. And now that the whole industry is suffering from significantly low demand, there will be more pressure to increase utilization and increase rental rates in the next year or so.
Operational issues caused by COVID-19
The issues experienced by plant hire companies are:
- Logistic disruption. Because of lockdowns, the supply chain became a major concern for the equipment rental sector. As such, even smaller projects had to stop and wait until things returned to normal.
- Employee safety on the construction site. Companies had to adopt a new way to work, especially with the need to minimize social interactions.
- The impact of legal contracts. Project contracts may lead to legal consequences if the rental company can’t fulfill its obligations. Nevertheless, companies may look into possible recourse, especially due to the circumstances.
Another concern for plant hires companies is keeping their depots open. Maintaining a depot even when business is slow means the company will bleed money due to the expenses. One solution is to reduce staff or seek help from the government instead of shutting down.
How will plant hire companies to be able to survive?
Putting these operational concerns aside, the equipment rental sector can keep operating if they focus on the right sector. As earlier mentioned, public infrastructure is essential, which means that you can get a steady demand even from small scale projects.
Residential housing construction is also not affected by the pandemic, as long as you’re able to follow health and safety protocols. The same also applies to small DIY projects. Profit here may be short-term but should help in keeping cash flow going until bigger clients return.
Conclusion | Opportunities and Challenges Faced by the Plant Hire Sector During the Pandemic
Commercial projects are the biggest money-makers for plant hire companies, but demand from this sector isn’t likely to increase in the meantime. Nevertheless, there’s hope that business will start to trickle in slowly in the coming year until such time when the pandemic is fully under control.
