Boom or bubble?
15 June 2021
I’d wager that a fair number of hirers would report the same experience as Pat McCluskey.
Pat is managing director of the busy independent, Hireline Plant & Tool Hire, whose main depot is near Dalkeith, just east of Edinburgh, and which has a second in Linlithgow to the west. He tells me that he is in a similar situation to the one described in an earlier blog post.
Basically, the vast majority of his fleet – which is far from insubstantial – is already out on hire, but demand continues to rise and he can’t source the new equipment he needs from suppliers.
“All my excavators are out and we’ve got 50. It’s the same with site dumpers: I re-hired two this morning but I’ve had to turn away another enquiry for four more because simply no-one else has any either. It’s the same with small tools – I even had to cross-hire a mixer today for a good customer.”
It’s a double-edged scenario. On one hand it’s positive because demand and revenue are up; but on the other side no-one wants to turn away business. And there’s the risk that customers might go elsewhere – although it seems that most other hirers are in exactly the same position, as has been mentioned before on the blog.
Pat says that he has been adding to the fleet in recent months with more compaction plates and cut-off saws when they’ve been available, but “they go out as soon as they arrive and then stay out”.
“House building is strong and one of our biggest customers has a couple of very large projects on the go,” says Pat.
“I don’t think Brexit has helped. Most people in Scotland wanted to stay in Europe and I think it’s caused a lot of delay and disruption. Manufacturers can’t get steel, components and other essential items.
“A customer this morning said he needed timber for a project and he’d been quoted availability in July. It makes you wonder if the demand bubble might burst, although I do think activity will remain strong overall.”
Indeed, given the supply issues, a slowdown – rather than a bubble burst – might almost provide a welcome respite.
On a more positive note, Pat also says that reduced availability means that customers are less likely to question the hire rate as they might have done previously. They’re simply grateful to get the kit at the moment.
● Read about another hirer in a similar Catch 22 position here.