‘Niche’ access is still performing if you think wider, according to Andy Bray
With the UK construction downturn likely to run well into 2010, rental companies still face long, difficult months with plant and equipment idling in the yard.
Predictions for the aerial work platform (AWP) market, however, offer some encouragement. While platform sales may be declining during the recession, rental uptake will hold firm and possibly increase. With the outlook still gloomy and investment on hold, companies are opting to rent rather than buy.
There’s other encouragement for UK hirers, too. According to figures just published in IPAF’s European Powered Access Rental Report 2008, the average fleet age in Europe for AWPs in 2008 was a relatively young 3.8 years. Of course, newer, state-of-the-art platforms make a more attractive rental proposition.
The crunch question for rental companies is, new or not so new, do you have the type of platforms that will sustain you through the downturn? Possibly not. During the construction boom, hirers have focused a substantial part of their investment on high volume, lower margin platforms - the booms and scissors which are the staple of the construction site. The lower volume, higher margin specialist platforms have been overlooked to a greater extent.
But with use for the bread and butter platforms down, the more specialised machines – insulated booms, the new-generation narrow scissors, spiderlifts – are still doing well. And niche platforms are in demand in many more areas than their tag suggests.
Construction itself is demanding more sophistication, hungry for platforms that give an edge in productivity, accessibility or versatility, particularly for fit-out when interiors need equipment with a more delicate touch. It could be a narrow chassis, low floor loadings, greater levelling ability or bigger outreach to machine weight ratio - features which get you to places other platforms can’t reach.
These capabilities are in demand in closely allied sectors that remain buoyant – building maintenance and refurbishment – and under-exploited markets for powered access, such as industry, infrastructure and utilities. There are also markets showing distinct growth, like facilities maintenance (FM).
A legacy of the latest retail and commercial property boom, with its emphasis on statement architecture, is the access conundrums created by exposed structural steel, decorative glazing, high atriums, suspended walkways, galleried floors and so on.
Window cleaners, painters and decorators, electricians, H&V engineers, security installers, audio visual specialists, sign-writers, and many others serving the FM market are reliant on specialist platforms to overcome access issues. In addition, major developers and construction players are picking up FM contracts as part of the new era of PFI awards in health and education.
With the work at height regulations filtering into working practices across all sectors, including the smaller trades, use of powered platforms for FM will only increase.
The current high cost of finance may make it difficult for hirers to diversify their plant offering to tap into these outlying sectors of business. But while they may not be able to revamp their fleet with the latest innovation, they do have the infrastructure and know-how to shift focus and pick up business in new sectors.
They should be casting their net into new areas of business and exploring ways of matching solutions to customer needs, even if they don’t come from their own yard but are cross-hired from someone else’s. Rental companies could be developing new and more profitable revenue streams from cross-hired equipment, rather than cutting margins in chasing scant construction rental for their traditional fleet.
Conversely, those with speciality plant could be actively seeking cross-hire as a route to market. It means they haven’t had to do the legwork to get the business, and exposes machines to new customers to help increase awareness and drive demand universally.
At IPAF’s recent summit in Dublin, speakers were urging rental companies to wake up to the emerging earning power of the specialist platform.
Consolidation in the European AWP rental industry has seen the small-medium, more specialised rental companies swallowed up by the volume rental giants – squeezing the specialism out of AWP rental supply to some extent. So cross-hire may currently be the best way of tapping into the earning power of specialist machines as the recession continues to bite.
Andy Bray is managing director of The Spiderlift Company