Inflation in Plant and Machinery Prices

23rd Jan 2019

Here is a chart showing the annual inflation rate for the ONS category "Machinery for Mining, Quarrying & Construction," which is probably the best category to look at for the price of excavators and dumpers, particularly the larger equipment. The data backs up out recent sense when we are buying equipment that things are getting more pricey and the rate of inflation seems to increase the larger the piece of machinery you are trying to buy. 

Not sure this can all be put down to the lower pound, as the bulk of the prices rises seem to have been coming in 2018, where inflation has averaged almost 4.5%. The increasing requirements on manufacturers to hit ever higher emissions standards is having an effect, and there is a growing sense that there are no easy gains left for manufacturers now. This means to keep improving is becoming more and more difficult and therefore costly.

We have also seen, particularly with the largest excavators we run that waiting lists for certain brands (I think we know who they are!) are becoming incredibly long. This creates an impression of scarcity and perhaps manufacturers underestimated the UK market especially in 2017-18. Often the case to see brand new equipment go through the auctions at a higher price than we can buy for, as it is available in a couple of days rather than in 6 months! All of this creates a sellers market. Whether this conitinues we shall see....