AT THE
HEART OF HIRE
L E A V I N G E U R O P E …
A significant event in the UK’s history took place on 29 March when the Prime Minister wrote to the European Council President to trigger Article 50 of the Lisbon Treaty, giving notification of Britain’s intention to withdraw from the European Union (EU). This follows the Referendum held on 23 June last year.
The question posed back then was whether to Leave or Remain. Now that Article 50 has been invoked - for the first time in the EU’s history - people are asking what exactly happens from now on. This is reminiscent of the situation before the Referendum itself: as the Forum in our June 2016 issue said, just two weeks prior to the vote, the long term impact of either outcome was hard to read, adding that “with four decades of membership, ‘Remain’ is clearly easier to model than ‘Leave’.”
Brexit raises many issues on a macroeconomic level, not least of which are the likely implications for UK businesses in terms of the future trading relationship with the single European market. A ‘hard’ Brexit would have the UK refusing to compromise on issues like the free movement of people in order to maintain access to it, while a ‘soft’ Brexit could be similar to Norway’s model, being a member of the single market and accepting the free movement of labour as a result. Article 50 states that, after a member country gives formal notification of its intention to leave, it has two years to negotiate its withdrawal from the EU, unless all other member states agree to an extension.
However, former Foreign Secretary Philip Hammond, now Chancellor, suggested the process of unpicking 43 years of treaties and agreements could take six years. Others believe it could take even longer, making it very difficult to make forecasts.
In the run-up to the Referendum, some senior Remain campaigners predicted an economic crisis in the event of a Leave vote, with falling house prices, economic recession and rising unemployment. However, the UK economy is estimated to have grown by 1.8% in 2016, second only to Germany among G7 industrialised nations.
Indeed, our Market Watch article on page 9 comments that the UK economy has surprised with the strength of its performance since the Referendum vote, adding, however, that the fact inflation rose to 2.3% in February - its highest rate for three years - suggests that hirers, like other purchasers, will face rising costs. And contradictory views concerning the future direction of interest rates once again show the diversity of analysts’ opinions trying to assess the path ahead over the next two years and beyond.
It is worth recalling that, in the website poll we carried out for our June 2016 issue, 63.7% of hirers voted to Leave. So perhaps the best approach is for industry professionals to concentrate on the here and now, trust their own judgement and proceed with confidence.
… R E M A I N I N G B U S Y
Focusing on the present situation suggests that our industry does indeed remain very busy regardless of Brexit. In our article starting on page 17, we report on how Rocket Rentals in Gloucestershire has not only moved to impressive purpose-built premises, but has also added a dedicated tool hire activity to meet demand from its traditional plant hire customers, with plans for further expansion. Similarly, in the article beginning on page 27 within our Lifting & Shifting Market Report, we discover that specialist hirer, Southern Hoist Services is winning business over a growing area, as well as serving customers in its region near the south coast, as new construction projects start.
Also, as we went to press, news came with a distinctly European flavour, that Boels Rental has acquired the Supply UK Group,
3
bringing to eleven the number of countries the Netherlands-based business has a presence in. As an aside, an interesting question is whether more international players and private equity firms might look at potential acquisitions in the UK owing to the weakness of sterling.
And, besides the Boels story, our news pages beginning on page 4 contain reports of hirers placing significant machinery orders to meet growing demand, opening new depots, expanding their activities, making acquisitions and maintaining their passion for hire. This suggests that, rather than trying to forecast the future, there are plenty of present opportunities for our industry to remain profitably occupied with.
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