Market Trends of Middle East and Africa Construction Equipment Industry
This section covers the major market trends shaping the MEA Construction Equipment Market according to our research experts:
Rising Infrastructure Spending to Drive the Growth of Construction Mining Equipment in Middle East and Africa
Each country in the Middle East region has grown in the construction sector in its unique way over the years, adhering to its own pace, norms, and ambitions. The United Arab Emirates is responsible for significant projects, owing to Dubai's more robust development and investment than the rest of the Middle East. High economic growth, a growing elite population, increased foreign investment, and other factors have contributed to this. Saudi Arabia, the United Arab Emirates, Oman, and Egypt are launching several infrastructure projects, including new megacities, railway projects, harbor projects, new airport projects, housing projects, and so on, all of which are expected to boost construction demand. The city's infrastructure development also contributes to the need for construction equipment. The building of major rail networks like Etihad Rail in the United Arab Emirates is also projected to propel the market for construction equipment in the United Arab Emirates.
Saudi Arabia represents the second-largest market for the construction sector in the GCC region after the United Arab Emirates, which occupies more than 34% of the revenue generated. Saudi Arabia holds a revenue share of 29%, followed by Qatar and Oman with 12% and 10%, respectively. The construction of high-rise buildings like the Jeddah Tower in Saudi Arabia is anticipated to increase the demand for construction equipment in Saudi Arabia.
Several infrastructure projects are being implemented in Africa. Some notable projects include Lagos-Ibadan Railway Line in Nigeria, the Addis Ababa-Djibouti Railway line between Ethiopia and Djibouti, Ethiopia-Djibouti Water Pipeline, and Dukem Manufacturing Hub in Ethiopia, Egypt's New Administrative Capital, Mombasa-Nairobi Standard Guage Railway in Kenya and Isimba Hydroelectric Power Station in Uganda. According to some estimates, about 31% of the infrastructure projects in Africa which require investments of USD 50 million or more are funded by China. China has signed 39 African countries for its much-acclaimed Belt and Road Initiative (BRI). All these factors have resulted in major orders for Chinese construction equipment manufacturers from Africa, which is also driving the growth of the African construction equipment market. For instance
- In December last year, Sany Heavy Industry Co. Ltd supplied 300 pieces of construction equipment to the China-Lagos Railway project in Nigeria.
Thus, various ongoing projects and future projects which the governments are initiating in the Middle East and Africa to improve the infrastructure are creating a demand for construction equipment which will propel the market's growth during the forecast period.
Saudi Arabia to Experience High Growth Rate
Saudi Arabia's construction industry has experienced rapid expansion in recent years, owing to government assistance through long-term economic diversification programs such as Saudi Vision 2030. Saudi Arabia is diversifying its economic resources to minimize its reliance on crude oil exports by boosting the tourism industry, which involves the construction of new hotels and commercial facilities. The revenue of the construction sector in Saudi Arabia increased over the few years. With the growing urban population, housing needs, and rapid diversification of the region's business from the big oil and gas industry to tourism and other sectors, the demand for construction activities in the region for residential, industrial, and commercial buildings increased in the past.
Saudi Arabia is in the middle of a major transformation agenda that includes many megaprojects, such as the tourist destination of the Neom super-city; the 334 square Kilometer entertainment city of Qiddiya; the development of the Unesco World Heritage site of Al-Ula; and the luxury, sustainable tourism-focused Red Sea Project.
These mega projects have resulted in many major orders for construction equipment, which has produced considerable growth in the construction equipment of Saudi Arabia. For instance
- In June this year, Zoomlion Heavy Industry Science and Technology Co. Ltd won orders for nearly a hundred units of construction equipment during Zoomlion Customer Day held in Saudi Arabia.
- In May last year, Doosan Infracore Co. won orders for 75 mid to large excavators from Saudi Arabia. These machines would be deployed at the construction site of Neom City in Saudi Arabia.
The aforementioned factors will likely drive massive demand for various construction equipment in the country during the forecast period.
