Can the UK's infrastructure plan bring growth to the equipment rental industry?

British Prime Minister Keir Stammer has promised to increase investment in infrastructure and vowed to form a government that "serves the builders, not the hinders". But can this really boost actual construction activities? What does it mean for the leasing industry? Lewis Tyler launched an investigation. (Released by "Leasing News", compiled and edited by Machinery Intelligence Station)

The gap between political commitment and reality

When Stammer took office as prime minister last year, his declaration of "serving the builders" aroused expectations. The Labor government regards infrastructure investment as the key to revitalizing the economy. It plans to build 1.5 million housing units, decarbonize the power grid within five years, and advance huge projects such as the Oxford-Cambridge railway line and the third runway of Heathrow Airport.

For the British construction industry and its equipment renters, which have been in a slump for two years, these commitments are like a shot in the arm. Data company Barbour ABI predicts that driven by infrastructure and energy demand, the size of the equipment rental market in the UK will reach 4.07 billion pounds in 2029 and grow by 14.3% in the next four years. The company pointed out that the estimated infrastructure investment of 700 to 775 billion pounds and the demand for low-carbon equipment will stimulate a sharp increase in the rental volume of construction equipment.

The short-term predicament still exists

However, the reality is much harsher:

The rebound in the construction industry at the end of 2024 has dissipated, and Trump's tariff policies and government bureaucratic procedures have delayed decision-making

Data from Glenigan shows that the number of major project launches in the January quarter of 2025 dropped sharply by 19% year-on-year

Last year, the overall growth rate of the leasing industry in the UK was only 2%. KPMG predicts that the growth rate will be approximately 2.5% in 2025

4. Leading enterprises are under pressure in terms of performance: Speedy Hire's profit in the fourth quarter fell short of expectations, HSS's same-store revenue dropped by 2%, and Vp Group's UK business saw both revenue and profit decline

The underlying logic of a long-term positive trend

Despite short-term fluctuations, the industry still has long-term growth potential:

1. The penetration rate of leasing continues to rise: The current penetration rate of 75% is expected to increase further. Contractors with tight funds are more inclined to lease rather than purchase

2. Environmental protection regulations drive updates: Strict environmental protection legislation forces enterprises to accelerate equipment upgrades, and leasing can avoid asset holding risks

3. Stable demand for core equipment: Earthmoving and lifting equipment account for 68% of the rental market share

4. Significant economic contribution: In 2022, the industry directly created 88,600 jobs and indirectly driven 44,800 jobs through the supply chain, contributing an added value of 14 billion pounds to the UK economy

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Ed Griffiths, the chief analyst of Barbour ABI, pointed out: "The transformation to intelligent, sustainable and flexible solutions will reshape the operating model of the construction industry in the next five years." As the CPA report reveals, the development trajectory of this industry, which underpins the lifeline of the country's infrastructure, will eventually be deeply bound to the economic recovery of the UK.