Sourcing the right equipment for your construction project
- Guest Blog
- 3 months ago
The economic recession had brought a gradual increase in work and productivity within the construction industry. But, with the rise in productivity, the competition of the market increases also; more construction companies compete for work, so they must ensure that they’re sourcing the right equipment for the right job – at a competitive price. As more firms saturate the market, demand and prices for equipment also start to increase – increasing contractor operating costs.
Renting your construction equipment
If a construction firm is working on a short-term project, or a one-off job, then it’s mostly better to rent equipment for the amount of time required. The reason for this is that it benefits the firm’s cash flow, as they are not making a significant one-off payment. Also, the firm does not have to absorb long-term repair, operating, and storage costs for the equipment being hired.
Though from 2012 to 2015, the combined annualised growth in the rental cost of earthmoving machines, forklifts and cherry pickers was set at 5.5% and between 2018/18 this is set to grow by 1.9% at 7.4%. This suggests that renting equipment isn’t getting any cheaper anytime soon. However, construction firms can make a saving when renting when the equipment is specifically utilised for a required job.
If a firm rents the wrong equipment or equipment that does not fit the purpose, it can be costly with time and money when working toward deadlines. This is why construction firms are now more and more reliant on third-party services that can help assist them in getting the right equipment that will aid the performance of a job in the most cost-effective and efficient manner. For example, Reconomy – specialists in servicing recycling solutions for the construction industry – can help firms with 8-yard skip hire and site equipment hire that allows them to rent based on the client’s specific on-the-job requirements so that the equipment is rented at a cost-efficient price for the right job.
Driving a project-specific rental
Project-specific rental is desirable for many reasons, as they save a company time and money when working on a job that may not be repeated. Whilst being tailored to the requirements of the job, they can provide the highest amount of utilisation possible, based on each machine that is rented if it is used properly.
In addition, if a construction firm has many jobs operating at the same time, then companies don’t have to incur the same logistical costs as those who purchase their equipment and move it from a site to site. This makes project planning less time-consuming and may even benefit from introducing industrial construction project management software – as those foreseeing the completion of a job can account for the specific nature of the equipment needed, as the nature of each job changes.
Although the annualised price growth of buying equipment from 2012/15 to 2015/18 fell 0.5% from 10.1% to 9.6%, this is still 2.2% more than the projected forecasts of annual rising rental costs. What this suggests, is that construction firms will need to establish whether the equipment they purchase will be able to perform all the necessary jobs on-site through the course of the machine’s lifetime. If it can’t perform a specific task, or a container isn’t fit for the job, then the firm could waste capital on purchasing tasks. It is more than likely that when it comes to more project-specific construction – firms will be more willing to rent a machine that benefits the bespoke nature of a job, rather than purchasing a machine that is less specific in its job-scope and specification.