Optimism in the UK construction sector hit an eight-month high in December 2018, according to the IHS Markit/CIPS UK Construction Purchasing Managers’ Index. This rise in confidence came despite a slowdown in growth caused by Brexit-related uncertainties. The ongoing lack of certainty post-Brexit will likely delay decisions further, but it shouldn’t deter construction companies from planning ahead – not least when it comes to expanding their fleets.
Know Your Construction Fleet
For construction companies looking at fleet expansion, a useful starting point is to know the size and composition of an existing fleet. An inventory can show up any gaps in a fleet, as well as the plant or vehicles that need replacing. It can also help you work out how big your company fleet needs to be.
One way to expand your fleet, yet mitigate the ongoing uncertainties in the construction sector, is to lease plant or commercial vehicles. One benefit of leasing is cashflow management; there’s no major capital investment, just regular monthly payments for the duration of the lease period.
Leasing can be beneficial in the short-term, but expanding your construction fleet by purchasing the equipment you need can be more advantageous in the long-term. Owning assets outright is one way of investing in your company’s future and can add value to your business.
It often works out cheaper to buy used equipment. Used plant and vehicles tend to hold their resale value better than their new counterparts. It’s also worth getting a comprehensive hpi check done so you can be confident that your new trade vehicle has no hidden secrets from its past.
Other factors to consider if purchasing equipment to expand your construction fleet are the ongoing costs. Unlike leasing, your business will be responsible for repairs and maintenance. One way you can avoid any nasty surprises, however, is through preventative maintenance.
Your business will also need to think about the cost implications of insuring your owned equipment, as well as the time it takes to train your staff. This is particularly relevant when you’re adding a new piece of equipment to your fleet.
Fleet expansion can be an effective way to help your construction company plan for challenges and opportunities that lay ahead. By weighing up your business needs against the options available, you can find the most appropriate solution and allow your company to look ahead with confidence.