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UK Construction Equipment Market 2023 to 2029: UK Government’s Ambition to Build 300,000 Houses Per Year Drives Growth

UK Construction Equipment Market 2023 to 2029: UK Government’s Ambition to Build 300,000 Houses Per Year Drives Growth
PR Newswire
DUBLIN, Jan. 22, 2023

DUBLIN, Jan. 22, 2023 /PRNewswire/ — The “UK Construction Equipment Market – Strategic Assessm…

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UK Construction Equipment Market 2023 to 2029: UK Government's Ambition to Build 300,000 Houses Per Year Drives Growth

PR Newswire

DUBLIN, Jan. 22, 2023 /PRNewswire/ -- The "UK Construction Equipment Market - Strategic Assessment & Forecast 2023-2029" report has been added to  ResearchAndMarkets.com's offering.

The UK construction equipment market is expected to grow at a CAGR of 4.41% during 2023-2029.

Rising government investment under UK's plan 'Build Back Greener' and 'Net Zero Strategy' is expected to prompt construction equipment sales in the UK during the forecast period.

The UK construction equipment market by volume is expected to reach 81.9 thousand units by 2029. The government's growth strategy, 'Build Back Better,' has supported economic growth through significant investment in infrastructure, skills, and innovation. The increase in UK construction equipment market sales can be attributed to some of the substantial infrastructure projects, such as HS2, where the government has invested USD 87 billion.

In 2020, the UK government announced an investment of USD 105.87 billion to boost growth and support the labor market. Over USD 61.40 billion of investment was confirmed for road and rail, USD 4.45 billion for the repair and maintenance of hospitals, and over billions of capital investment to provide 40 hospitals by 2030, upgrading 500 schools over the next ten years and delivering 18,000 novel prison places across England and Wales by 2025.

Additionally, the government invested USD 23.29 billion in High Speed 2, Europe's largest construction project. Approximately USD 21.17 billion investment was set aside for the Heathrow Airport Expansion would include the construction of a third runway (2,000 meters) to the northwest of the other two.

It is estimated to be completed in 2050. The government has planned to invest USD 108 million in 2022 for the upgradation of Rail 530 Projects situated over the Eastern Bank. Further, to cut the dependence on fossil fuels and reach climate targets, the UK has targeted net zero emissions by 2050.

For instance, developing two solar projects, with a combined capacity of 100MW by EDF Renewables, is expected to increase crane sales during the forecast period. Additionally, the development of the wind farm project Dogger Bank A (in three phases), situated between 130-190 km from the Northeast Coast of England, valuing USD 1.00 billion, is expected to boost crane sales in the UK construction equipment market.

Market Trends and Drivers

UK Government's Ambition to Build 300,000 Houses Per Year

  • With its Conservative manifesto (economic plan) of 2019, the UK government pledged to build over 3,00,000 houses annually. As a part of this pledge, the government has also aimed to lay out measures for effective planning systems and better use of land and vacant buildings to deliver the homes that communities need. 'Future Home Standard' published in 2021, focusing on energy efficiency, claimed that the houses built in 2022 will yield 31% fewer carbon emissions. Consequently, the homes built in 2025 will produce 75-80% fewer carbon emissions.
  • The government's 'Help to Build' equity loan scheme, launched with 5% deposits and backed by USD 170.6 million of funding, has enabled people to outdo the extreme mortgage costs to build a home. This scheme is expected to boost the government's ambition to build 300,000 homes annually and boost the UK construction equipment market growth.

Investment in Public Infrastructure Through the National Infrastructure Strategy and National Infrastructure & Construction Pipeline

  • The NIS aimed to transform UK's infrastructure to achieve net zero emissions by 2050. Significant investment is planned in areas of the UK, which covers healthcare infrastructure, the transformation of bus and bicycle infrastructure, more robust flooding and coastal erosion protection, and better connectivity of the country via HS2 and an improved strategic road network.
  • Additionally, the UK government announced its National Infrastructure and Construction Pipeline document in 2021, which laid out the plan with an approximate budget of USD 740 billion for infrastructure projects over the next ten years. The country's plans for the public infrastructure are anticipated to contribute to the UK construction equipment market. Further, the transport sector consumed the most significant part of the investment amount, receiving USD 81.46 billion between 2021-2025, and the energy sector received the second largest share.

Investment in Renewable Energy to Reach Net Zero Emissions

  • British Petroleum Company (BP) has planned to invest USD 20.22 billion in the UK's energy system by the end of 2030. BP has committed to helping the country to achieve its ambition to boost energy security and reach net zero. It has also planned an investment of USD112.34 million to develop new ports, harbors, and shipyards, including the construction of four ships to aid the offshore wind projects across the UK.
  • The UK government funded USD 9 million for 24 projects under the Longer Duration Energy Storage (LODES) competition. This funding is projected to support the development of new energy storage technologies and help the UK transition to renewable energy sources. Additionally, the government has invested USD 41.5 million in 2022 for renewable energy transformation across the UK. This investment intends to scale up domestic renewable energy and increase biomass production in the UK through the 'Biomass Feedstocks Innovation Program,' which received funding worth USD 40.44 million.

Market Restraints

Acute Scarcity of Skilled Labour Workforce Has Raised the Labour & Projects' Cost

  • Brexit added pressure to the existing labor shortage situation in the country, as according to the Office for National Statistics (ONS), employment in the construction sector declined from 2.3 million in 2017 to 2.1 million at the end of 2020 in the UK, representing a 4% fall in UK-born workers and a 42% fall in EU workers. The mass exit of EU workers from the country has left the British construction industry facing a severe labor scarcity.
  • The new point-based immigration system, introduced by TCA, has restricted the entry of general laborers into the UK, leading to the acute labor shortage, which has driven up the labor and projects cost - further hampering the UK construction equipment market. Labor costs rose to approximately 6% in 2021 compared to 2020 due to a skilled labor shortage of tradespeople, including carpenters, groundworkers, bricklayers, plasterers, and plant operators.

Increasing Inflation Is Expected to Impact the Growth of The Construction Projects in the Country

  • According to Office for National Statistics (ONS), construction material prices rose by 25.2% YoY in April 2022 compared to 2021. The country's steel prices surged to high levels, including nickel prices, which increased by 97%, zinc by 16%, aluminum by 6.2%, and copper at 3.5% in the first quarter of 2022.
  • Additionally, ONS claimed that Britain's inflation rates surged to the highest level in 40 years in April 2022. The consumer price inflation rose to approximately 7% in the 12 months during April 2022, increasing the cost of living in the region. The Bank of England predicted that inflation would hit 11% by November 2022. There are approximately 16,755 construction companies in the country at a significant risk of closure which is a 54% rise compared to 2021. Such factors are likely to hamper the growth of the UK construction equipment market.

Vendor Landscape

  • Caterpillar has the most substantial share in the UK construction equipment market. Caterpillar, Volvo, Liebherr, & JCB are the market leaders in the UK industry and has a strong distribution network & have a diversified product portfolio.
  • Hitachi Construction Machinery, Komatsu & Hyundai Construction Equipment are emerging strong in the UK construction equipment market. These companies are introducing innovative products to capture the construction equipment industry's share. For instance, in 2022, Hitachi Construction Machinery launched the first zero-emission five-tonne battery-powered excavator (ZX55U-6EB) in the European market.
  • Kobelco and Mecalac companies have an established presence in the UK construction equipment market over a significant period. They generally lag in innovation and advanced technology products compared with their competitors. For instance, Kobelco has not introduced or included recent technology & equipment, whereas market leader Caterpillar recently introduced an advanced series of backhoe loaders (426F2 and 424B2) in 2022.

Key Vendors

  • Caterpillar
  • JCB
  • Kubota
  • Liebherr
  • Takeuchi Manufacturing
  • Komatsu
  • Volvo
  • Hyundai Construction Equipment
  • Hitachi Construction Machinery
  • CNH Industrial

Other Prominent Vendors

  • Kobelco
  • Hydrema
  • Mecalac

Distributors Profiles

  • GORDONS Construction Equipment
  • MOLSON Equipment
  • Dennis Barnfield Ltd - Construction
  • Warwick Ward

Key Questions Answered:
1. What is the growth rate of the UK construction equipment market?
2. What is the expected number of construction equipment units sold by 2029 in the UK construction equipment market?
3. How big will be the UK construction equipment market size by 2029?
4. Who are the key players in the UK construction equipment market?
5. What are the trends in the UK construction equipment market?

Report Attribute

Details

No. of Pages

109

Forecast Period

2022 - 2029

Estimated Market Value in 2022

61475 Units

Forecasted Market Value by 2029

81915 Units

Compound Annual Growth Rate

4.1 %

Regions Covered

United Kingdom

Key Topics Covered:

1. Introduction

2. The Market Overview

3. Market Landscape
3.1. Uk Construction Equipment Market by Type (Volume & Value)
3.1.1. Earth Moving Equipment
3.1.1.1. Excavator
3.1.1.2. Backhoe Loader
3.1.1.3. Motor Grader
3.1.1.4. Other Earth Moving Equipment (Other Loaders, Bulldozer, Trencher, Etc.)
3.2. Material Handling Equipment
3.2.1. Crane
3.2.2. Forklift and Telescopic Handler Aerial Platform (Articulated Boom Lifts, Telescopic Boom Lifts, Scissor Lifts, Etc)
3.2.3. Road Construction Equipment
3.2.3.1. Road Roller
3.2.3.2. Asphalt Paver
3.3. UK Construction Equipment Market by End-User (Volume & Value)
3.3.1. Construction
3.3.2. Mining
3.3.3. Manufacturing
3.3.4. Others (Power Generation, Utilities Municipal Corporations, Oil & Gas, Cargo Handling, Powergeneration Plants, Waste Management, Etc)

4. Market Dynamics
4.1. Market Drivers, Restraints, Trends, Advantages for Uk, Key Economic Regions, Import/Export Trends, Supply Chain Analysis, Covid-19 Impact

5. Technology Development
5.1. Advent of New Technology

6. Competitive Landscape
6.1. Competitive Landscape Overview
6.2. Major Vendors (Caterpillar - Volvo Construction Equipment - Komatsu - Hitachi Construction Machinery - Liebherr - Kubota - Takeuchi - Hyundai Construction Equipment - Jcb - Cnh Industrial
6.3. Other Prominent Vendors
6.4. Distributors Profile

7. Quantitative Summary
8. Report Summary
8.1. Key Insights
8.2. Abbreviations
8.3. List of Graphs
8.4. List of Tables

9. Report Scope & Definition

For more information about this report visit https://www.researchandmarkets.com/r/c6fup4

About ResearchAndMarkets.com
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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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