Construction Plant, Hire Or Buy?
Material movement and construction equipment can represent a considerable investment to a business, but can be seen as a long term investment of capital.
Static plant will have a more or less continuous role to play, but that involved in say, road and building construction are exposed to market fluctuations of growth and decline, and currently, hiring would probably seem the better option.
Buying plant machinery from auctions may well bring financial possibilities within scope, but can carry obvious uncertainties.
Hiring plant equipment when and where it is needed, ensures equipment never sits idle, and not only can the hiring costs be offset against tax, but of course the costs of repair and servicing fall to the hire company.
National research has estimated that construction accounts for around two-thirds of the plant hire of the UK market.
An advantage of hire, is it allows access to the most modern equipment as it comes on to the market, without having to make an investment that may not prove as satisfactory as expectations, and also means no depreciation on machinery.
Different construction plant hire sectors cater for differing equipment needs. Farmers, for instance will usually own tractors which have general applications all year, but seasonal plant such as combine harvesters and balers are often hired.
Earthmoving machinery, backhoes, excavators, bulldozers etc are often hired as “top-up” plant in civil engineering works that expand and contract as work progresses, often returned at the end of the project.
The next project may call for different CASE construction equipment requirements which hired plant would cover, rather than “making do” with existing machines.
Market conditions are also a consideration, and currently the hiring market is very competitive and offering lower comparable rates than for years!