Construction companies are reassessing whether to own plant and specialist equipment outright as energy prices, financing costs and uncertainty put pressure on project margins.
Nearly three in five UK businesses reported some concern about energy prices in August, according to the Office for National Statistics (ONS). Energy costs have risen by as much as 25% over the past six months for some businesses, while UK construction output fell by 0.5% in the three months to July 2026.
The cost pressures come as contractors also face inflation, higher borrowing costs and less predictable project pipelines. A recent purchasing managers’ index survey found that UK construction companies were experiencing some of their sharpest cost increases in almost 30 years, with raw material and fuel prices affected by the conflict in the Middle East.
Capital flexibility
Owning equipment can provide operational control and security where assets are used consistently and have predictable working lives. However, tying capital up in machinery can restrict a company’s ability to invest elsewhere when market conditions change.
Research cited by BNP Paribas Leasing Solutions found that only 17% of construction leaders across Europe said capital tied up in physical assets had never constrained growth. Respondents identified market expansion, sustainability projects, technology upgrades and research and development as potential uses for capital released from owned assets.
For contractors, the choice between ownership and alternative access arrangements is therefore becoming more dependent on how reliably an asset will be used, its financing cost and the scope to redeploy capital.
Equipment life cycle comes under scrutiny
The research also found that 94% of construction leaders believed equipment became obsolete faster than it had five years earlier. The finding reflects changing expectations around energy efficiency, emissions performance, digital capability and the ease with which machinery can be upgraded or refurbished.
Although a machine may remain operational, higher energy consumption can make it less commercially attractive than a newer model. Nearly two-thirds of respondents, or 64%, said the ease of refurbishment and recycling was influencing procurement decisions.
BNP Paribas Leasing Solutions chief executive Neil Pein said the industry did not need to abandon ownership, but should distinguish between assets that justify being owned and those where flexibility or end-of-life management is more important.