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CEA responds to Spring Budget

In what was inevitably a challenging budget announcement during an election period, there's some potential positive news for construction equipment manufacturers and users.

After continued representations from the industry, the Chancellor undertook to bring forward changes to the full expensing rules to bring leased equipment into the scheme. Whilst in an ideal world ‘leasing’ may also cover equipment bought for rental purposes, the published supporting information is unclear regarding the timing and detailed content of the necessary legislation.

Construction Equipment Association Director, Nick Ground commented, “It is too early to tell if this is going to be of help to construction equipment purchasers, but it will benefit some of our members who lease equipment for production purposes. The danger is that the promised legislation may remain as a promise as the general election looms.

“What can be welcomed is the fuel duty freeze after the unwelcome extra costs associated with the banning of rebated red diesel for construction purposes in 2022," Nick continued. "The much-trailed reduction in employees’ national insurance will be a boost for working families’ household budgets and may reduce some of the pressure on employers for wage increases. Employer’s national insurance contributions remain untouched and are still a significant tax on employment."

In the UK's construction equipment sector, the numbers tell a story of substantial growth and significance. Total revenue surpassed £15 billion, a notable increase from £13 billion in 2018. Employment in the sector stands at over 44,000, highlighting its importance in providing jobs. With an investment of over £250 million annually in research and development, innovation remains a priority.

The UK's machine production exceeds 68,500 units, contributing significantly to its Gross Value Added (GVA) which amounts to £2.5 billion. Impressively, exports constitute more than 60% of the production share, showcasing the sector's global competitiveness. This sector comprises over 1,500 companies, solidifying its diverse and dynamic nature within the UK economy. Internationally, the UK ranks 5th globally and 1st in Europe for machine production, underlining its prominent position in the industry.

As at 2023 – source KGP.

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