The mini excavator for hire market’s growth over the past decade has been for the most part ‘gradual’ as these machines roll of the manufacturing floors with new tech and features that allow these machines to outperform standard excavators in urban construction sites. The unprecedented surge in demand for earthmoving equipment recently, especially for mini excavators within the local mini excavator rental market, has been directly attributed to Victoria’s ‘big build’ pivot towards maintenance, and fleet managers are reporting that utilisation rates for mini excavators under five tonnes have reached capacity.
Contrasting this fact with the Victorian State Budget data released recently sheds some light on this phenomenon. From the budget, it becomes quite clear that there is a structural shift whereby budgets that were initially used for greenfield projects are being reallocated towards regional road maintenance, level crossing removals, and utility upgrades. Analysts are pointing towards this pivot towards brownfield remediation that has for the most part resulted in the humble mini excavator becoming the most sought-after asset for within the borders of not only Melbourne, but also Geelong.
Marcus Vance, a well-positioned fleet analyst for the construction equipment sector spectrum indicated that the industry is at present experiencing a major reallocation of sub-contractor fleets not just in Melbourne, but also in Geelong which is receiving more of the Victoria’s build budget allocation for remedial works and maintenance. According to him, just two years ago, tier-one contractors were screaming demand for 20-tonne excavators, currently; these same contractors are fixated on 1.5T to 3.5T range and for good reason.
The migration is mainly due to the fact that larger than 6T machines are almost useless in urban construction sites as the congestion does not allow these machines to ‘move’ adequately enough to be effective which in essence grinds productivity too low for comfort. Mini excavators on the other hand according to Vance, are able to perform superiorly especially when a project revolves around localized station upgrades or suburban rail loop preliminary works as these projects are ‘jam-packed’ with structures around the target work areas.
Precision is crucial in these high-density or rather live-traffic environments where the use of heavy and bigger machinery severely restricted which are why machines that is smaller are preferred by contractors. Even home improvement contractors are replacing raw labour with min excavator models that they take for hire which allow them to almost halve their project cost and enhance their margins.
Nevertheless, it must be noted that the relentless demand has indeed bumped-up dry-hire rates for the mini excavator class and according to estimates are up by an 8% compared to the same time last year.
The increase in rates is mainly affecting local plumbing and landscaping sub-contractors that have led these contractors to edge away from the practice of ad-hoc renting and lean towards long-term operating leases which brings to the table its own set of pros and cons.