Tool Hire Market Recovery Forecast by 2010

Oct. 29, 2008 - PRLog -- The new market report, based on sales returns from 95% of the industry, found that Tool and Equipment suppliers are increasingly feeling the pinch of a downturn in demand for tool hire from a number of key end use sectors, resulting in falling volume demand and rising price competition.  MTW points to a more difficult trading period in the next 12-18 months, with a slowdown in capital expenditure by tool hire companies resulting in rising price competition amongst tool manufacturers who supply to this sector.  The report forecasts a decline of some 25% in capital expenditure during 2009, reflecting the wider slowdown in construction activity and subsequent impact on demand for tools throughout the supply chain.  

Cost reduction and efficiency measures are likely to dominate the tool hire market in 2009 as the economic slowdown deepens, with redundancies and ‘scaling down programmes’ by the tool hire companies likely to become increasingly common.   However, the report suggests that whilst there is likely to be some pain in the short term, the focus on profitability by the industry now, should assist the market in the medium term by facilitating a faster return to profitability growth than many other sectors in the construction industry.  As such, MTW forecast that by early 2010, the hire industry will be in a strong financial position to raise capital and is likely to increase spending on tools and equipment in order to meet the anticipated rise in demand later in 2010 and into 2011.  

For the short term, however, MTW point to the public sector as crucial for underpinning some market demand and preventing further substantial declines in volume and value.  In addition, with contractors less willing (or able) to invest in capital equipment, tool and equipment hire becomes an increasingly attractive proposition, sustaining the market to some extent during the next 1-2 years.  MTW identify the tool hire operations able to meet this changing demand, enabling manufacturers to target those companies who are best placed to continue to perform reasonably well in 2009 and beyond.

However, whilst there remains some element of optimism for some companies, MTW Research’s analysis of the tool hire market found that almost 25% of tool hire companies are considered to be ‘at risk’, reflecting the difficult trading environment at present.  With a low number of new market entrants identified by MTW in the last 12 months, the need for focused, effective and targeted marketing is crucial for tool and equipment manufacturers to increase sales at present.  

The report provides a useful review of tool hire market and industry trends in late 2008 as well as ranking the tool hire companies and providing sales estimates enabling market share estimation.  In addition, MTW have also produced an effective method of profiling each company and illustrating their key financial performance indicators through their ‘at a glance’ charts.  The report also includes mailing, telephone and contact details for each company providing comprehensive industry analysis and a useful sales & marketing tool.  The report is available to purchase from GBP375 from MTW Research’s website where a free sample is available to download or by calling 08456 524324.

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MTW Research are a leading publisher of UK market research reports, databases and competitor analysis reports for a wide range of sectors including DIY, environmental, construction, building, manufacturing and several other industries.