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1、2024THE ECONOMIC IMPACT OF THE UK CONSTRUCTION PLANT-HIRE SECTOR2The Economic Contribution of the UK Construction Plant-hire Sector3The Economic Contribution of the UK Construction Plant-hire SectorTABLE OF CONTENTSForeword 4Executive summary 61.Introduction 101.1 The construction plant-hire sector

2、101.2 Economic benefits of the sector 132.Construction plant-hires direct contribution to the UK Economy 162.1 Direct contribution to GDP 162.2 Direct contribution to employment 163.Total contribution of the construction plant-hire sector 203.1 Indirect contribution 203.2 Induced contribution 213.3

3、Total contributions 22Appendix:Methodology 26Sizing the market 26Estimating the economic impact 284The Economic Contribution of the UK Construction Plant-hire SectorFOREWORDSince the CPA commissioned our colleagues at Oxford Economics to research and write this report into the size and scope of the

4、UKs plant-hire sector,it has provided us with an opportunity to look forward but also reflect on,what makes this sector so unique.It has showcased the people who work in it and the passion they bring to what they do.It shows why it is important we do more to raise the profile of plant-hire and celeb

5、rate its vital contribution to the wider construction sector.This is the first fully comprehensive study of the UKs plant-hire sector,and it makes a compelling read for both those employed in the sector,but also for policymakers and stakeholders the people we are looking to influence and inform,abou

6、t why it matters.It also helps put into perspective the breadth and scope of the sector and why it remains a key destination for highly skilled jobs and roles.From plant equipment operators,mechanics and logistical support to back-office roles and administration,the report shows that the sector only

7、 operates because of the people who work in it.While the report is an opportunity to showcase the state of plant-hire,it also acts as a chance to review the progress made over recent years and the contribution our members make to the wider UK economy.Over the course of the last few years,plant-hire

8、businesses have had to navigate their way through a variety of potentially seismic issues,each of which have meant companies have had to adapt and evolve,in order to survive.The pandemic threw up a unique set of challenges and opportunities for plant-hire businesses,both in how to survive the immedi

9、ate shock,but also taking advantage of new technologies and ways of working.Our members played a vital role in the national effort to support the NHS and essential services,and it is something we look back on proudly.The wider economic downturn showed the resilience and professionalism of the sector

10、,with companies doing their best for their clients and customers,providing a first-class service,in challenging economic circumstances.While recent years have been tough,companies have learnt the importance of drawing upon experience,communication,innovation,and planning for the future.Put simply,wi

11、thout the plant-hire sector,the construction sector itself cannot operate in its present form.As we look to the future,it is one full of opportunities,growth,new technologies and innovations.Decarbonisation and the move to a net zero economy has been at the forefront of policymakers plans it is impo

12、rtant that our sector plays its part in this process,as the move away from diesel and fossil fuels gathers pace.This,alongside the rise of AI and digitalisation,will all have a profound impact on plant-hire companies in the coming decades.Across this time,the role of the CPA will also change as we m

13、eet these future challenges and opportunities,working hand in hand with our members in supporting them,providing guidance,and standing up for them in the corridors of power.This economic impact study helps set the foundations for moving forward for the CPA across every facet of our work and engageme

14、nt and celebrating 90 years of supporting the UKs construction plant-hire sector.It has only been possible because of the contribution our members have made to our continuing success.Steve Mulholland Chief Executive 5The Economic Contribution of the UK Construction Plant-hire SectorS Stone6The Econo

15、mic Contribution of the UK Construction Plant-hire SectorEXECUTIVE SUMMARYThe construction sector is an important component of the UK economy,employing 7%of the UK workforce,and making activity in all other sectors of the economy possible through the infrastructure,offices,and factories that it buil

16、ds.However,an important enabling sector that sits behind construction and allows it to function in an efficient way is the construction plant-hire sector.From its beginnings during World War II,this sector includes all the companies that hire out construction plant and equipment to the construction

17、firms carrying out building projects.This report looks at the economic benefits the construction plant-hire sector brings to the UK.These benefits arise through three channels:the direct impact,which includes the impact of the companies themselves;the indirect impact,which occurs through the supply

18、chain spending of these companies;and the induced benefits,which arise from workers in the sector and its supply chains spending their wages.CONSTRUCTION PLANT-HIRE ACTIVITIES SUPPORT UK GDPIn this report we have estimated the size of the UK construction plant-hire sector at 10.5 billion in revenue

19、in 2022.This includes the revenue of companies whose sole function is hiring out construction equipment,but it also includes the plant-hire revenues of larger firms that also offer other products and services.From this revenue,we estimate the construction plant-hire sector directly contributed more

20、than 6.4 billion to UK GDP in 2022.This is chiefly through the wages the sector pays its workers and the profits it generates.The remainder of the revenue is used to purchase goods and services from the supply chain.We estimate the share of this spending that occurs in the UK helped to support a fur

21、ther indirect GDP contribution of 3.2 billion in 2022,across sectors such as construction and manufacturing.14.0 billionGVA contribution of the construction plant-hire sector to the UK economy in 2022.218added to the UK economy for every 100 directly generated by the construction plant-hire sector.7

22、The Economic Contribution of the UK Construction Plant-hire SectorLastly,we estimate a third impact on GDP,as the workers of the plant-hire sector and its supply chains spend their wages in the UK economy.We estimate this induced effect at more than 4.4 billion in 2022.Altogether,this means the cons

23、truction plant-hire sector is estimated to contribute a total of 14.0 billion to UK GDP in 2022.The total GDP impact is 2.18 times the direct impact alone.This means that for every 100 contributed to GDP directly by construction plant-hire,the sector supports a total of 218 around the economy.THE SE

24、CTOR ALSO CONTRIBUTES TO UK EMPLOYMENTThe construction plant-hire sector itself employed an estimated 88,600 workers in 2022.This includes those who actually work for plant-hire firms and operators hired in on a temporary basis.These workers are estimated to be approximately 16%more productive than

25、workers on average in the UK,with a higher share being company managers or directors than in the broader labour market,and also being marginally more qualified.However,the sectors employment impact goes beyond this.The supply chain activity supported by the sector and described above also supports a

26、n estimated 44,800 jobs around the economy.And lastly,the effect of workers spending their wages supported an estimated 58,200 jobs.In total this means that we estimate the construction plant-hire sector supported a total of 191,5001 jobs in 2022.The total employment impact is 2.16 times the direct

27、impact alone.This means that for every 100 people directly employed by construction plant-hire,the sector supports a total of 216 jobs around the economy.1 Note:figures do not sum due to rounding.191,500Employment contribution of the construction plant-hire sector to the UK economy in 2022.16%Constr

28、uction plant-hire workers were 16%more productive than the UK average in 2022.216 jobssupported across the UK economy for every 100 people directly employed by the construction plant-hire sector.8The Economic Contribution of the UK Construction Plant-hire Sector9The Economic Contribution of the UK C

29、onstruction Plant-hire Sector10The Economic Contribution of the UK Construction Plant-hire Sector1.INTRODUCTIONThe construction industry is a large part of the UK economy,employing about 7%of the overall UK workforce.Aside from disruptions caused by the Covid-19 pandemic,which affected construction

30、to less of an extent than other parts of the economy,the industry has also been steadily growing over the last 10 years,as Fig.1 illustrates.More importantly however,the sector builds the infrastructure that enables all other parts of the economy to function,from the factories and offices that produ

31、ce products,through the transport networks needed for connecting customers and suppliers,to the communications networks that allow even remote workers to operate.Construction activities involve many tasks that require only a worker and hand tools,such as bricklaying,framing,and roofing.However,many

32、more tasks require the use of larger equipment and as 2 Keith Potts,University of Wolverhampton,Construction During World War II:Management And Financial Administration3 Construction News,From the shovel to the backhoe,19964 Route One Publishing Ltd.,The Trend Towards Construction Machine Rental In

33、Europe,2016such,the industry makes heavy use of construction-specific and more general plant and machinery.This includes equipment from the small scale of mini diggers and dumpers used on individual residential projects up to the tower cranes and articulated dump trucks used in skyscrapers and large

34、 site projects.This is where the construction plant-hire sector comes in.In many cases,it is not an efficient use of capital for construction firms to own all the plant and equipment that they may need on any given job,and so they hire in from businesses that specialise in owning the equipment and r

35、enting it out.1.1 THE CONSTRUCTION PLANT-HIRE SECTOR1.1.1 The sectors history and its importance todayThe history of construction plant hire in the UK dates back to World War II,when the British government had taken ownership of considerable quantities of construction plant and equipment,and control

36、led both hiring rates and who could purchase new equipment.2 The post-war years then saw the formation of the plant-hire companies that have been so important to the construction industry since,3 saving the construction firms that were rebuilding Britain from the need to purchase capital equipment t

37、hemselves.In the 21st century,construction plant-hire in the UK is considered a more-established sector than in its European neighbours,with companies more likely to own their own fleet in countries such as Germany.4 This is partly shown by industry association statistics:the UKs Construction Plant-

38、hire Fig.1:UK construction sectors contribution to GDP over time million,2019 pricesSource:Ofce for National Statistics2010020406080100140201120122013201420152016201720182019202020212022202312011The Economic Contribution of the UK Construction Plant-hire SectorAssociation represents 1,900 companies

39、in the UK,while the continent-wide European Rental Association represents approximately 5,000,5 including the UK companies.It can also be estimated using national statistics by looking at the size of the construction plant-hire sector compared to the size of the construction industry itself.While tr

40、uly accurate detail does not exist for this comparison,we can take the closest available information as a proxy.Based on this,across the EU-27,GDP contributions by the construction plant-hire sector were 1.8%of the GDP contributions of the construction industry itself in 2021.By comparison,this figu

41、re was 3.6%in the UK,highlighting the significantly more important contribution that plant hire makes in the UK.61.1.2 Construction plant-hire is a diverse sectorThe construction plant-hire sector is a diverse set of businesses that range from very large international companies whose annual revenues

42、 are in the hundreds of millions of pounds and whose offering covers the entire range of construction equipment,down to family-owned firms that have a small number of vehicles in their rental fleet.5 European Rental Association website front page6 Calculations based on Eurostat Structural Business S

43、tatistics,comparing“value added”by firms in the“77.32 Renting and leasing of construction and civil engineering machinery and equipment”sector to value added by firms in the Construction sector in 2021.Datasets sbs_ovw_act and sbs_sc_ovw respectively.7 Some large companies,also known as prime contra

44、ctors,have in-house construction equipment rental companies.However,as these are subsidiaries of the parent company and tend to rent solely to the parent company rather than the wider market,we do not consider these as part of the sector for the purposes of this report.8 The International Standard I

45、ndustrial Classification used by national statistics agencies around the world,including the UKs Office for National Statistics,has a sector that is close to what we are trying to capture.This is“77.32:Rental and leasing of construction and civil engineering equipment.”However,statistics associated

46、with this classification will capture revenues of these companies that are from other activities,such as materials sales or construction services.Similarly,this classification will not capture construction plant-hire revenues at companies that are classed under a different heading.As such,we take a

47、more bespoke,bottom-up approach.The sectors businesses are also diverse in their areas of focus:Some firms specialise in a single type of specialist equipment,such as tower cranes or concrete pumps,while others have a broader range,sometimes including other types of equipment like agricultural machi

48、nery.Some companies may focus purely on hiring out equipment,while for others that may be one area of activity alongside others such as sale of equipment,sale of construction materials,or even construction services.7 Some firms may offer“self-drive”hire only,where the company provides only the equip

49、ment,while others will offer operated hire,where both the equipment and the operator are provided.Others will offer both options.Because construction plant-hire activity is spread across the economy in this way,official statistics do not offer a complete picture of the sectors scale.Instead,a more b

50、espoke approach must be applied,which is what this analysis sets out to do.8 Further details on this approach are given in the Appendix.In this report,we define the sector by focusing on the areas of equipment detailed in Fig.2.Fig.2:Definition of the UK construction plant-hire sectorTypes ofconstru

51、ctionplantConcretepumpsCranesandliftingequipmentDumpersEarthworksequipmentExcavatorsLoadersRailMaterialsprocessing12The Economic Contribution of the UK Construction Plant-hire SectorAlthough data on rentals by type are not readily available,we can look at sales of certain construction equipment to a

52、ll customer types to get an understanding of the relative popularities of each.Of the 9 Note:due to data availability,this chart represents sales volumes(i.e.units sold)rather than sales values(i.e.pound cost).As larger equipment like articulated dump trucks have a higher unit value than smaller equ

53、ipment like mini excavators,this skews the display to some extent.Please also note that this chart represents sales of new equipment,but a large second-hand market also exists.types of equipment typically rented out by construction plant-hire firms,mini excavators are by far the most numerous,follow

54、ed by telehandlers and crawler(i.e.,tracked)excavators,as shown in Fig.3.9Cranes and lifting equipment also form a key part of the construction plant-hire market,although data on sales of these are not available.Fig.3:UK sales volumes of new construction equipment by equipment type,2022Number of uni

55、tsSource:Construction Equipment Association/Of-Highway Research0Wheeled excavatorRough terrain lifttrucks-mastedBackhoe loadersCrawler excavatorsMini excavatorsTelehandlersCrawler dozersRigid dump trucksMotor gradersAsphalt finishers5,00010,00015,00020,000Articulated dump trucks6606201,00018,6509,56

56、09,100455120Wheeled loader 80hp300Wheeled loader 80hp310Skid-steer loader285Crawler loaders8215101513The Economic Contribution of the UK Construction Plant-hire Sector1.2 ECONOMIC BENEFITS OF THE SECTORIn this report we assess the size of this important economy-enabling sector in terms of its direct

57、 impact or footprint,i.e.,how many staff it employs and how much it contributes to the UK economy in terms of gross domestic product(GDP).However,the benefits the sector brings go further than this immediate footprint.Construction plant-hire firms also make purchases in UK supply chains,both for con

58、struction equipment but also for all the other inputs needed to run a business,such as fuel,energy,and office supplies.This is known as the indirect impact.Lastly,the sectors employees and firms in its supply chains spend their wages in the consumer-facing economy,at retailers,restaurants,and entert

59、ainment venues.In turn,these establishments make their own supply chain purchases,supporting further economic activity.This is known as the induced impact.Further details on this approach are given in the Appendix.In the rest of this report,Chapter 2 provides our assessment of the sectors direct imp

60、act on GDP and employment.Chapter 3 then gives our estimates of the indirect,induced,and total impacts that the sector has on the UK economy.This is followed by a methodology appendix,which provides more detail on the approaches we have used.Fig.4:The channels of impact in our modelEmployees of the

61、company and its suppliers spend their wages in the wider economy,generating more GDP and jobs.Added together,these three efectsdirect,indirect,inducedcomprise the total economic impact of the company or sector.It also spends money with suppliers who employ staf and generate GDP.They use other suppli

62、ers in turn.DIRECTIMPACTINDIRECTIMPACTTOTALIMPACTINDUCEDIMPACTA company employs staf and generates GDP.14The Economic Contribution of the UK Construction Plant-hire Sector15The Economic Contribution of the UK Construction Plant-hire Sector16The Economic Contribution of the UK Construction Plant-hire

63、 Sector2.CONSTRUCTION PLANT-HIRES DIRECT CONTRIBUTION TO THE UK ECONOMYThe first impact channel that we analyse is the direct contribution of the construction plant-hire sector to the economy.10 Our estimate is based on a detailed review of public financial statements of construction plant-hire firm

64、s,and calculations made using sector-specific data from the Office of National Statistics.Please refer to the methodology appendix for a full description.2.1 DIRECT CONTRIBUTION TO GDPIn 2022,we estimate UK firms earned 10.5 billion in revenue from construction plant-hire activity.10 These revenues

65、supported a 6.4 billion direct contribution to UK GDP,in the form of employee wages and salaries,business profits,and taxes on production such as business rates.This is the construction plant-hire sectors direct contribution to GDP,equivalent to 0.3%of the UK economy.To provide context,the sectors c

66、ontribution was greater than that of the water transport and electrical equipment manufacturing sectors in 2022.2.2 DIRECT CONTRIBUTION TO EMPLOYMENTThrough its economic activity,the construction plant-hire sector directly supported employment of 88,600 people.Combining this with the estimated direc

67、t GDP contribution of 6.4 billion gives an average contribution to GDP per worker,or labour productivity,of 72,700.This puts the productivity of the sector roughly in line with the manufacturing sector,and 16%above the national average of 62,600.Fig.5:Direct contribution to GDP of the construction p

68、lant-hire sector in 2022Fig.6:GDP contribution per employee in selected industries,2022bn,2022 pricesSource:Oxford Economics,ONS0.05.010.015.04.95.25.76.46.98.613.0PrintingWater transportElectrical equipmentmanufacturingConstruction plant-hireProgramming and broadcastingRubber and plasticproducts ma

69、nufacturingPublishing,2022 pricesSource:Oxford Economics0255075125100Thousands35,90050,30059,10062,60072,70073,400117,900Public administration,education and healthDistribution,hotels andrestaurantsConstructionUK economyConstruction plant-hireManufacturingBanking,finance andinsurance17The Economic Co

70、ntribution of the UK Construction Plant-hire SectorThis direct employment includes those who work directly for companies offering plant hire,including owners and managers,administrative staff,mechanics,plant operators who are employed directly by the company,and operators that plant-hire companies e

71、mploy on an ad hoc basis for individual customer contracts.2.2.1 Demographic breakdown of sector workforceLooking at the type of roles that workers in the construction plant-hire sector fill,the most prominent category is managers and directors at 31%of the total.This compares to just 11%across the

72、economy as a whole,reflecting the large number of small businesses in the industry with owners who also run the firm.The construction plant-hire sector also has a larger share of workers in skilled trades and plant operator roles than the broader economy,reflecting the need for machinery mechanics.B

73、y contrast,the industry has fewer people working in professional and associate professional roles,such as solicitors,IT,scientists,etc.We next look at the sectors workforce by highest qualification earned.The largest category is those with degrees and other higher education qualifications,at an esti

74、mated 35%of the total,perhaps reflecting the high share of those in manager and director roles.The next-largest category is those with A levels or equivalent,at 25%of the total.Both of these figures are higher than across the economy as a whole,which are 31%and 21%respectively,pointing to a more hig

75、hly-educated workforce in the construction plant-hire sector than across the wider workforce.Fig.7:Occupations of construction plant-hire sector workforce11,12Fig.8:Qualifications of construction plant-hire sector workforce1311 Based on Office for National Statistics Annual Population Survey(APS)dat

76、a on the workforce in the broader Renting&leasing of machinery,equipment&tangible goods sector,as the closest available data.Employment in rental and leasing of construction equipment makes up approximately half of this broader sector,which also includes the rental and leasing of agricultural equipm

77、ent;air and water transport equipment,and office equipment.12 Note,figures for“whole economy”do not sum to 100%as a further category called“personal services”(e.g.,hairdressing)has been excluded from the chart as irrelevant to the construction plant-hire sector.13 Based on Oxford Economics estimates

78、 using ONS APS data on both the specific Renting and leasing of construction and civil engineering equipment sector,and the broader Renting&leasing of machinery,equipment&tangible goods.Source:ONSShare of total(%)0202530354045Managers&directorsSkilled trades,plant operatorsand basic rolesProfessiona

79、ls&associateprofessionalsAdmin,sales&customerservices51015Construction plant-hireWhole economy31%11%29%23%20%42%20%16%Source:Ofce for National StatisticsShare of total(%)Degree or otherhigher educationData do not sum due to roundingA levels and equivalentGCSEs A*-C or equivalent Other qualifications

80、No qualifications34.924.523.06.211.518The Economic Contribution of the UK Construction Plant-hire Sector2.2.2 Geographic split of sector workforceWe estimate the geographic split of the sectors direct workforce based on data from the Office for National Statistics,finding that just under half(45%)of

81、 the total are based in the southern regions of South East,South West,London,and East of England.This largely reflects the population distribution of the UK,with approximately the same share of the working age population living in these regions.However,the main difference is that a large share of pe

82、ople live in London,whereas by comparison it is a smaller region for construction plant-hire employment.A similar pattern is seen across the other parts of the UK,with Wales,Northern Ireland,and the North East all representing a small share of the construction plant-hire direct workforce,reflecting

83、the relatively smaller populations in these geographies.Scotland represents roughly a tenth of the sectors workforce,as well as roughly a tenth of the UKs working age population.Fig.9:Estimated geographic split of construction plant-hire sector direct workforce,2022Note:figures do not sum due to rou

84、nding9%2%5%9%9%4%7%11%11%13%15%6%19The Economic Contribution of the UK Construction Plant-hire SectorS Breeze20The Economic Contribution of the UK Construction Plant-hire Sector3.TOTAL CONTRIBUTION OF THE CONSTRUCTION PLANT-HIRE SECTORIn this chapter,we explore the wider benefits that the constructi

85、on plant-hire sector brings to the UK economy through its indirect and induced impacts on GDP and employment,and what this means for the sectors total impact.3.1 INDIRECT CONTRIBUTION3.1.1 Indirect GDP contributionThe construction plant-hire sector makes significant purchases from suppliers in the U

86、K each year.This includes the construction equipment that is hired out,most of which is manufactured overseas,as well as spare parts and maintenance tools.However,it also includes many other categories of goods,such as fuel,office supplies,computers,and services such as legal and accounting.We estim

87、ate the sector supported a GDP contribution of 3.2 billion in 2022 through this supply chain spending.The sectors where this impact was the largest were the manufacturing sector at 710 million,reflecting spending on UK-made equipment,parts,and other manufactured products,and the retail&wholesale sec

88、tor at 455 million,representing the impact of materials being supplied to construction plant-hire firms.Notable impacts were also felt in the administrative services sector,which includes the renting of road vehicles needed to transport construction equipment,and the transport&storage sector,transpo

89、rting materials and equipment to construction plant-hire firms.3.1.2 Indirect contribution to employmentThe construction plant-hire sector supports further employment across a wide range of industries through the supply chain purchases that it makes.We estimate that in total,the sector supported 44,

90、800 jobs in 2022 through this channel.This includes a large number of jobs supported in the manufacturing industry,part of which represents workers at UK manufacturers of construction machinery,as well as service parts needed for those manufactured vehicles.Fig.10:Indirect contribution to GDP of the

91、 construction plant-hire sector in 2022,by sectorm,2022 pricesSource:Oxford Economics0Financial servicesProfessional servicesInfo&communicationsTransport&storageAdministrative servicesManufacturingRetail&wholesale200400600800OtherConstruction71045544532026526526011033021The Economic Contribution of

92、the UK Construction Plant-hire SectorAside from these sectors with notable links to plant hire,the sectors supply chain spending supports jobs in other areas of the economy,such as in the professional and administrative services needed to help support business activity.3.2 INDUCED CONTRIBUTION3.2.1

93、Induced contribution to GDPWorkers employed by the construction plant-hire sector spend their wages in the consumer-facing economy,as do employees in the supply chains of the plant-hire sector.This wage spending in businesses such as shops and restaurants supports further economic benefits,as those

94、businesses then make supply chain purchases and pay their own staff.Altogether,this wage spending supports an induced contribution to GDP,which we estimate at 4.4 billion in 2022.The sector where this impact is most pronounced is the real estate sector,which reflects spending on household rent and m

95、ortgage payments,at nearly 1.2 billion.Beyond this,the retail&wholesale sector saw an estimated benefit of 650 million,representing the wages and profits of shops selling to consumers.Fig.11:Indirect contribution to employment of the construction plant-hire sector in 2022,by sectorFig.12:Induced con

96、tribution to GDP of the construction plant-hire sector in 2022,by sector2,000JobsSource:Oxford Economics0Financial servicesProfessional servicesInfo&communicationsTransport&storageAdministrative servicesManufacturingRetail&wholesale4,0006,0008,00010,000OtherConstruction9,6007,7007,2006,9004,3002,800

97、1,3001,2003,800500m,2022 pricesSource:Oxford Economics0Financial servicesProfessional servicesInfo&communicationsAccommodation&foodAdministrative servicesManufacturingRetail&wholesale1,0001,500OtherReal Estate1,16065040530523022522020599522The Economic Contribution of the UK Construction Plant-hire

98、Sector3.2.2 Induced contribution to employmentConsumer spending by the workers in the construction plant-hire sector and in firms in its supply chains supported an estimated 58,200 jobs in the UK in 2022.The largest impacts were felt in consumer facing sectors such as retail and wholesale,with 14,40

99、0 workers supported,and accommodation and food services,with 8,700 workers supported.These sectors have a much larger employment impact compared to others than seen in the GDP impact,due to the relatively lower levels of worker productivity in these sectors.Further effects were also felt around the

100、economy in sectors away from consumers,such as administrative services and manufacturing.These jobs supported represent the supply chains of the businesses where consumers directly spend their money.3.3 TOTAL CONTRIBUTIONS3.3.1 Total contribution to GDPAcross the three channels described in this rep

101、ort,we estimate the construction plant-hire sector supported a 14.0 billion contribution to UK GDP in 2022.This result means that for every 100 contributed to GDP directly by construction plant-hire,the sector supports a total of 218 around the economy as a whole.Fig.13:Induced contribution to emplo

102、yment of the construction plant-hire sector in 2022,by sectorFig.14:Total contribution to GDP of the construction plant-hire sector in 20222JobsSource:Oxford Economics0HealthProfessional servicesInfo&communicationsAccommodation&foodAdministrative servicesManufacturingRetail&wholesale416OtherTranspor

103、t&storageThousandsEducationOther services6810121414,4008,7004,5003,9003,5003,4002,6002,3002,3002,20010,400Source:Oxford Economics Billion0468101214DirectIndirectInducedTotal26.43.24.414.023The Economic Contribution of the UK Construction Plant-hire Sector3.3.2 Total contribution to employmentIn tota

104、l across the three channels of impact described above,we estimate the construction plant-hire sector supported over 191,500 jobs in 2022.This means that for every 100 people directly employed by construction plant-hire firms,the sector supports a total of 216 jobs around the economy.Fig.15:Total emp

105、loyment contribution of the construction plant-hire sector in 2022Source:Oxford EconomicsJobs(thousands)0100120140160180200DirectIndirectInducedTotal20Note:figures do not sum due to rounding40608088,60044,80058,200191,50024The Economic Contribution of the UK Construction Plant-hire SectorS Breeze25T

106、he Economic Contribution of the UK Construction Plant-hire Sector26The Economic Contribution of the UK Construction Plant-hire SectorThis appendix section provides an overview of the methods and approaches that Oxford Economics has used to estimate the size and impact of the UK construction plant-hi

107、re sector.First we explain the techniques used to calculate the size of the sector in terms of the companies involved and the scale of their revenues and employment.We then set out the economic modelling framework that we use to estimate the direct,indirect,and induced contributions to GDP and natio

108、nal employment.SIZING THE MARKETThe first step in estimating the scale of the impact that the construction plant-hire sector has on the UK economy is in gathering information on the companies involved.Collecting a list of company namesThis began with collecting the names of construction plant-hire c

109、ompanies from several sources,including:CPA membership list,provided by CPA;Desk research to look for other existing lists of the largest construction plant-hire companies in the UK;A search of the Companies House database for all companies that are listed as being in the Standard Industrial Classif

110、ication code“77.32 Renting and leasing of construction and civil engineering machinery and equipment”;and A search of the Companies House database for all companies listed outside of the 77.32 sector but with key words in their name such as“plant hire”,“tool hire”,and different categories of plant s

111、uch as“access”and“digger”.The latter point turned up many“false positives”where the company name included a key word but the businesses was unrelated to the sector,such as sales of horticultural plants.The company names were manually investigated,with these false positives removed.The different sour

112、ces were compiled into one list,with duplicates then removed.Collecting existing financial informationThe CPA membership data group members into categories based on their revenue.We used these data to collect further information from Companies House.Companies whose activities are above certain thres

113、holds(at least one out of 10.2 million revenue,5.1 million balance sheet,or 50 employees)are required to report detailed financial accounts publicly,which are freely available on Companies House.We gathered the latest accounts for all of the companies above these thresholds in the CPA members list a

114、bove plus other large firms gathered by desk research and recorded the available data.These included revenue,headcounts,employee compensation,and capital investment in plant and machinery.In some cases,a split of revenue was provided between revenue from plant hire and from other business activities

115、.Companies that fall under these thresholds are required to publish a much more limited set of accounts,although typically do publish headcount.We collected this information for all identified companies that published it.Lastly,we also collected data from the Office for National Statistics(ONS)on th

116、e“77.32 Renting and leasing of construction and civil engineering machinery and equipment”sector,including APPENDIX:METHODOLOGY27The Economic Contribution of the UK Construction Plant-hire Sectorthe average headcount per firm,the average revenue per firm,and the average revenue per worker.Estimating

117、 total revenuesWe next need to estimate the total revenues of the companies identified as construction plant-hire companies.Firms with revenues published in accounts:this is already collected,as described above.CPA members without published revenues:we estimate their revenue from the membership band

118、 in which they are placed for the purposes of calculating CPA membership fees.For instance,if the band is for all firms with revenues 150,001 to 350,000,we use the midpoint of this group as our estimate,i.e.250,000.Non-members without published revenues:We have collected headcount data for firms in

119、this group from published accounts where available.For these,we apply an average revenue per worker ratio calculated from ONS data.For the longer tail of smaller firms where we have been unable to collect headcount data,we assume revenue in line with the average per firm(excluding the largest firms)

120、for the sector,taken from ONS data.Estimating construction plant-hire revenuesWe are trying to capture the size and impact of the construction plant-hire sector rather than that of all companies offering plant-hire services among other products and services.This means that we need to estimate the sh

121、are of total revenues that represents construction plant-hire revenues.As described above,some large companies provide a split in their accounts of revenue from plant hire separately from other activities.These accounts therefore allow us to calculate an average ratio of plant hire revenue to total

122、revenue.We calculate this ratio for two groups of companies:those who list one of their primary activities as“77.32 Renting and leasing of construction and civil engineering machinery and equipment”,which comes out as 75%,those who did not specifically list this as one of their primary activities,wh

123、ich comes out as 36%.We apply these ratios to companies where we do not know the split,as follows.We apply the first,higher,of these ratios to the revenues of CPA members who list 77.32 as one of their primary activities.This is on the basis that these firms are likely to be highly engaged in the co

124、nstruction plant-hire industry and as such,this activity is likely to make up the majority of their revenues.We apply the second,lower,of these ratios to the revenues of CPA members who dont list 77.32;to non-members who do list 77.32;and to non-members who dont list 77.32 but do have“plant hire”in

125、their name.This is on the basis that these firms are likely to be less engaged in the construction plant-hire industry and as such,this activity is likely to make up a lower share of their revenues.Lastly,we apply an arbitrary low assumption of 10%to other identified firms that are not CPA members;d

126、o not list 77.32 as a primary activity;and do not have“plant hire”in their name.This is a conservative assumption for these firms for whom either little information exists,or the majority of their business is thought to be activity such as sales of materials or equipment,construction services as opp

127、osed to plant hire,or other activities.Further expert input was collected from CPA as to the plant hire share of revenues in the 100 largest identified companies,which we used to adjust the assumptions described above.28The Economic Contribution of the UK Construction Plant-hire SectorESTIMATING THE

128、 ECONOMIC IMPACTEconomic impact modelling is a standard tool used to quantify the economic contribution of an investment or a company.As discussed in the introduction to this report,impact analysis traces the economic contribution of an investment through three separate channels:Direct impact refers

129、 to activity conducted directly by the construction plant-hire sector in the UK;Indirect impact consists of activity that is supported as a result of the procurement of goods and services by the construction plant-hire sector in the UK,purchases by those companies in turn,and so on.Induced impact re

130、flects activity supported by the spending of wage income by direct workers and those in the supply chain.Fig.16:Direct,indirect,induced,and total economic impactsDirect economic impactDirect GDP contributionThe headline financial metric used in this report is the gross value added contribution to gr

131、oss domestic product,referred to in this document as the GDP contribution of the construction plant-hire sector.The GDP contribution differs from the revenue of the sector in that it subtracts supply chain spending from each company.This means that using GDP removes any issues associated with double

132、-counting.For instance,if one construction plant-hire company leases equipment from another and then leases it to a customer,this would count as revenue for both companies.Using GDP removes this double-counting.DIRECTIMPACTINDIRECTIMPACTTOTALIMPACTINDUCEDIMPACTConstruction plant-hire sectors own wag

133、es,profits and employmentPurchases by construction plant-hire sector of inputs from suppliersSuppliers own supply chainsConsumer spending out of employees wages:Food and beveragesRecreationClothingHousehold goodsGDP contributionEmployment29The Economic Contribution of the UK Construction Plant-hire

134、SectorWe use what is known as the“income approach”to calculating GDP,which is the sum of employee compensation and corporate profits(in the form of EBITDA,or earnings before interest,taxation,depreciation,and amortisation).We have collected this information for the larger companies with full publish

135、ed accounts and therefore calculate the direct GDP contributions of these firms simply by adding these data points together.We calculate estimates of direct GDP for the companies where this information is not available.We do this by estimating a GDP revenue to GDP contribution ratio for the plant-hi

136、re sector,using the average ratio from data collated from full published accounts.We then apply that ratio to the previously-estimated construction plant-hire revenue of the companies without full published accounts.Direct employment contributionAs described in the previous sub-section,we have colle

137、cted headcount data from all larger firms and estimated employment for smaller ones.This includes all those workers employed directly by construction plant-hire firms.We also add an estimate of the number of self-employed operators the sector hires out alongside with its rental equipment.This is don

138、e by estimating the spend by the sector on contractors from ONS data(more detail below).This is converted to headcounts based on average wage data for construction plant operators.The wages of these workers are also added to the direct GDP contribution.Indirect and induced economic impactsIndirect a

139、nd induced impacts are estimated using an input-output model,which gives a snapshot of the UK economy at a given point in time.The model shows the major spending flows from:final demand,which refers to consumer spending,government current and capital spending,business investment,and exports to the r

140、est of the world;intermediate spending,i.e.,what each sector buys from every other sector,also known as the supply chain;the distribution of income between employment and other forms such as corporate profits.An input-output model represents a nations economy as a table,which is used to calculate th

141、e effect of changes in spending by consumers,by an industry,or by others,on other industries and therefore on the economy as a whole.These input-output tables ultimately measure the multiplier effects of an industry by tracing the effects of its inter-industry transactionsthat is the value of goods

142、and services that are needed to produce the output of the individual sector being studied.These models can be used to measure the relationship between economic changes or shocks and the final outcome across the whole of the economy.Oxford Economics used the input-output analytical table for the Unit

143、ed Kingdom for 2019,published by the ONS in 2023,for this analysis.This was the most recent dataset available at the time of analysis.Calculating supply chain spendingThe first step for calculating the indirect economic impact using the input-output model described above is to estimate the supply ch

144、ain spending of the construction plant-hire sector.That is,the total magnitude of spending in the UK by the sector and the breakdown of this into different products and services.Total supply chain spending by each company can be worked out as revenue minus the direct GDP contribution,with the logic

145、being that revenue is used to fund employee compensation,profits,and supplier purchases.30The Economic Contribution of the UK Construction Plant-hire SectorWe can therefore calculate supply chain spending for the companies where we have collected full accounts by subtracting the GDP contribution fro

146、m the revenue.We assume that the share of total supply chain spending that relates to the plant-hire part of each business is equal to the share of revenue that is plant-hire related.We must also estimate the supply chain spending for other companies where this information is not available.We do thi

147、s by calculating the average ratio of supply chain spending to revenue from the data collected from companies with full accounts,and applying this to the plant-hire revenue estimated for companies without full accounts.We then estimate the sectors of the economy in which the supply chain spending ta

148、kes place,i.e.which types of goods and services plant-hire firms buy,using data from the ONS and IMPLAN.14 These data allow us to build a spend profile of a typical firm in the construction plant-hire sector.This gives us the set of inputs used to calculate indirect and induced GDP and employment im

149、pacts.14 IMPLAN is a US-based provider of economic impact data which provides a granular industry breakdown of the US economy.Use of these data enables industry-specific insight to apply to the UK construction plant-hire sector as a proxy.Calculating GDP and employment contributionsIndirect GDP impa

150、cts are calculated by inputting the supply chain spending estimated above into Oxford Economics UK input-output model.This calculates GDP impacts for the UK as a whole as well as detail on the individual sectors that are benefitting from the impact.The model calculates results for 105 different indu

151、stries.For purposes of illustration,these have been pooled into broad industry categories.For example,the professional services industry amalgamates among others:legal and accounting services;market research;and engineering and management consultancy.GDP impacts are converted into headcounts based o

152、n estimates of GDP per worker,which are calculated from data published by the ONS.Direct,indirect,and induced employment figures in this report have been rounded to the nearest 100 full time equivalent(FTE)jobs.The multipliers quoted in the report represent the multiple of direct impacts that accoun

153、t for total impacts.For instance,if 20 FTE jobs were direct impacts and the total impact multiplier was 2,then the total impact(i.e.direct,indirect,and induced)would be 40 FTE jobs.These multipliers are calculated from the input-output model results.31The Economic Contribution of the UK Construction

154、 Plant-hire SectorOXFORD ECONOMICSOxford Economics was founded in 1981 as a commercial venture with Oxford Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost indep

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158、eadership capabilities from econometric modelling,scenario framing,and economic impact analysis to market surveys,case studies,expert panels,and web analytics.Oxford Economics is a key adviser to corporate,financial and government decision-makers and thought leaders.Our worldwide client base now com

159、prises over 2,500 international organisations,including leading multinational companies and financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.All data shown in tables and charts are Oxford Economics own data,except where otherwise

160、stated and cited in footnotes,and are copyright Oxford Economics Ltd.This report is confidential to the Construction Plant-hire Association and may not be published or distributed without their prior written permission.The modelling and results presented here are based on information provided by thi

161、rd parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections shown.To discuss the report further please contact:Rob Harbron,Associate Director,Economic Impact Consulti

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