Equipped for growth: Revenue is expected to rise steadily as the economy and investment levels improve.
London, United Kingdom (PRWEB) August 05, 2013
A wide range of companies rent or lease office equipment to preserve their cash flow and benefit from tax breaks. Leasing equipment is common for start-ups because it significantly reduces the initial capital outlay involved in getting a business going. Competition mainly comes from external factors, such as the low price of computers and laptops, used or second-hand stores that stock similar equipment, and online companies and auction websites that offer equipment at competitive prices.
The Office Equipment Leasing industry was severely affected by the global financial crisis and the resulting UK recession, with industry revenue falling over three consecutive years through 2009-10. The largest decline was in 2009-10, when revenue plummeted by 35.7%. According to IBISWorld industry analyst Lewis Sutton, “The recession resulted in fewer business start-ups and lower capital expenditure by companies meant firms retained their equipment for longer.” As the economy stabilised, demand for products rented and leased from the industry steadily increased, except in 2011-12. Over the five years through 2013-14, industry revenue is forecast to fall at a compound annual rate of 7.1%, meaning it remains despite a few years of growth. Although industry revenue is projected to rise by 2.1% to £689.5 million in 2013-14, it will remain far below pre-crisis levels.
As computers, laptops and the peripheral equipment have become cheaper, some businesses have opted to purchase instead of renting or leasing them. However, the development of new computers and related technology can contribute to industry growth and demand by providing firms with a way of updating their equipment more regularly without having to spend as much.
Sutton adds, “Over the five years through 2018-19, industry revenue is forecast to return to modest growth as the UK economy take tentative steps towards recovery, and business investment in computer hardware and networks steadily rising.” New office and computer products available for rental will contribute to future industry growth, but lower prices for existing products will limit revenue levels.
The Office Equipment Leasing industry has a very low concentration level and there are no dominant players. IBISWorld estimates that the four largest firms will account for just 5.7% of industry revenue in 2013-14. The largest firm, Hamilton Rentals, is estimated to generate just 2.8% of industry revenue.
Concentration is low in most of the industry's product segments due to the relatively generic nature of many of the items on offer. This makes it difficult for rental and leasing firms to gain a significant advantage in the market because they cannot differentiate the majority of their products from their competitors' offerings. Firms are also restricted by the location of their business. Given the nature of the industry, firms benefit greatly from being close to downstream markets. If a firm wanted to broaden its geographic coverage, it would usually have to open an additional warehouse or branch.
For more information on the Office Equipment Leasing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in the industry rent and lease office machinery and equipment, computers and related peripheral equipment, and office furniture.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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