Market Trends of ASEAN Construction Machinery Industry
Concrete and Road Construction To Propel The Demand
- COVID-19 significantly impacted the ASEAN construction sector over the past year. Construction work of all sizes and incomes was forced to stop due to the strict lockdown and social distance regulations. As a result, neither the labor nor the equipment typically employed for construction was utilized.
- Companies that sold, rented, or leased out the machinery for a set time were negatively impacted. The demand for heavy-duty equipment was completely lost due to the construction industry's complete shutdown. Due to China's complete closure to trade, there was no need to use the machinery because raw material transportation was also stopped.
- Over the past few years, the road construction equipment market has witnessed significant growth, mainly due to increased road development programs initiated by regional governments.
- The need for construction equipment has been rising in response to the increase in road construction operations, and the importation of these machines is fueling this demand. The primary factors, led by the rising investment in building projects in the ASEAN region, have helped Singapore's heavy machinery exports to the rest of the ASEAN region rise consistently over the years. The Philippines and Thailand are two instances of ASEAN countries with fast economic growth. Thailand's imports of heavy machinery from Singapore have increased at the second-fastest rate in the region.
- With the rise in road construction activities, the demand for construction machinery has been increasing, which is supported by importing these machines. Exports of heavy machinery from Singapore to the rest of the ASEAN region have grown steadily over the years, supported by the key drivers and increased investment in construction projects in the ASEAN region. Two examples of high-growth opportunities in ASEAN are the Philippines and Thailand, among others. Singapore's heavy machinery exports to Thailand have the second-fastest growth in the region.
- Thus, various measures implemented by governments in the ASEAN area to promote infrastructure projects and increase government engagement in project planning, coordination, and financing are anticipated to fuel market expansion during the forecast period.
Increasing Demand for Construction Machinery in Vietnam
Vietnam's rising construction and infrastructure development projects are mostly to credit for the country's recent growth in the market for construction equipment.
Vietnam's machinery and equipment industry has grown significantly over the past ten years. This is demonstrated by the fact that between 2010 and 2019, the net revenue reported by businesses in this industry grew by 14.3% annually. Until 2020, Vietnam had over 2,200 businesses that produced machinery and equipment, bringing in a combined USD 4.6 billion.
Under the Public-Private Partnership model, a number of public infrastructure projects are undertaken, such as the expansion of Vietnam's airport. The Vietnamese government intends to invest USD11 billion in airport development over the following five years, with the project scheduled to begin in 2022.
By 2030, the government intends to spend 65 billion on road improvements. By 2030, the building of a road network is anticipated to account for around 48% of all investments made in the transportation sector. The Long Thanh Airport (USD16 billion), the Ho Chi Minh City Metro (USD6.2 billion), the North-South Express (USD18.5 billion), the Hanoi Ring Road (USD368 million), the Hai Van Tunnel 2 (USD312 million), and the Lien Chieu Port in Da Nang (USD147 million) are all significant road construction projects that will be completed in 2022.
Considering all the ongoing and future construction activities in Vietnam, the crane market is expected to witness steady growth over the forecast period, propelling the country's construction machinery market.
