NZ GM of Kennards Hire on the equipment hire industry and post-recession outlook
Video / NZ Herald
Equipment hire has long been seen as a barometer for the construction industry and the wider economy, and according to Kennards Hire, it’s reporting a big increase in demand.
The hire company has had its inquiries for equipment hire grow by 60% compared to this time last year.
Kennards HireNew Zealand general manager Tom Kimber believes the equipment hire industry can be an indicator of where the economy is headed.
“When businesses first see the downturn, the first thing they will go back to is the hire gear because you can send it back,” Kimber said.
“But then on the other end, when they’re starting to see an uptake, they’re less likely to invest in capital because they don’t have the confidence or the capital might be forthcoming because of eroded reserves and things. So they dip their toe into the hire industry and get gear that way.”
Tom Kimber, NZ GM of Kennards Hire, on the equipment hire industry and post-recession outlook. Photo / Alex Burton
Actioned quotes for Kennards have increased by 19.5% compared to this time in 2023, with business development opportunities – in terms of larger hire equipment packages – also up by 33% on 2023.
Kimber thinks that while activity in the industry is currently low, the pipeline of work seems to indicate green shoots are coming.
“The calendar year 2025 has got the promise that we’ve all been talking about, you know, it’s well slated to survive to 25.”
He said the equipment that’s seen the most interest is broader than in previous years, particularly from larger infrastructure companies.
A diverse range of requests requires continued investment, particularly for an industry that’s reliant on functional equipment.
“If you stand still, you’re actually going backwards. What we were hiring out 10 years ago is different to what we hire out in the next decade.
“You have to keep constantly assessing your fleet reinvestment and then look for the new technology piece that makes you more relevant to your book.”
Tough period
The hire industry was significantly impacted during the Covid-19 pandemic due to heavy restrictions on what sectors could operate.
With many of Kennards' branches based in Auckland, the business had its revenue drop by roughly 80% overnight through the lockdowns.
Kimber said it was a highly restrictive scenario for the business, and once restrictions were lifted “it was uncharted waters”.
“There was definitely no rule book for it. We got through to the other side and the uptick was significant for a number of varying reasons, supply issues, the quantitative easing and the stimulus that the Government put into the economy, everything sort of lined up.
“I was drinking from the fire hydrant for a while, and we rode that wave.”
The business did see an uptick in equipment hire for home renovations during the period, although the cost of living has impacted those opportunities.
He said the ongoing recession was thought of as one the country needed to have, but acknowledged that it’s been “very long and very wide”.
Kimber compared the current recession to the Global Financial Crisis of 2008, believing the post-Covid hangover is taking a longer time to cycle through.
Kennards Hire made a profit over the last financial year, something its larger competitor Hirepool was unable to do.
Competitor troubles no problem
It’s definitely not all green shoots for the hire industry however with Kennards’ larger competitor Hirepool reporting a $5.4 million loss before tax after revenues declined and interest costs skyrocketed.
In accounts for the year to June, revenues at Hirepool Group declined 11% to $160m, paired with finance costs increasing 51% to $35.9m.
The loss comes just a year after Hirepool began paying dividends for the first time in a decade when $70.46m was delivered to shareholders in 2023.
Notes to the accounts said earnings had declined due to market trading conditions, and the downturn had continued into the 2025 financial year.
Kimber confirmed that despite Hirepool’s financial woes, Kennards was able to make a profit over the last financial year, although he was shy as to how much.
“We’ve seen the recession, we’ve seen the contraction in activity, but we’ve managed to calibrate our business to the conditions.
“It sounds clichéd about managing for a cycle, but that’s what we’ve had to have done and it’s prepared us for the uptake.”
Looking ahead, Kimber said the trend he is seeing is in the renewable energy sector, particularly for geothermal, solar and wind projects.
On Kennards’ actioned quotes, most of the inquiries are related to planned infrastructure spend by the Government.
That includes the likes of the slated roads of national significance and the aforementioned renewable projects.
Commercial construction and domestic housing projects are yet to see growth according to Kimber.
“That’s basically because consent in both those spaces is still very low and there’s quite a lag effect from the consent process through to putting a spade in the ground.”
As for 2025, Kimber is hopeful that the promise of what is in front of Kennards can be realised.
“Confidence leads to investment, investment leads to activity and activity leads to prosperity.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
