Middle East & Africa Construction Equipment Market Outlook 2027

Surrounded by the southern and eastern shores of the Mediterranean Sea, Africa is the second largest continent in the world both by area and population, covering 6% of the total earth's surface, made up of 48 countries and six islands. The booming construction industry in the region heralds opportunities for companies that manufacture construction machinery and equipment, as well as companies that sell used and refurbished heavy equipment and machinery. Even though the region is attracting investments, the maintenance and the spread are quite uneven. The gap in infrastructure and the maintenance needs across the region is huge. Along with the developing oil exports, the need for heavy construction machinery is increasing. This is to support the overall construction equipment market in the region over the forecasted period.

According to the recently published report titled The Middle East & Africa Construction Equipment Market Outlook, 2027, the region's construction equipment market has stood at around USD 14 billion, which is projected to grow by more than 7%. In terms of construction, the infrastructural development projects in the UAE and the worsening conditions of road transport are expected to drive the market in the region. The growth regression supports the conclusion that the returns to infrastructure have been lower in the Middle East and Africa region than in developing countries as a whole. Governments have been making an effort to decrease the gap by building more advanced infrastructure and supporting the construction industry with subsidiaries and financial backup. Even as the increasing need for better housing has given rise to the construction equipment market in the region, the lack of economic activity in the backward countries in the region acts as a hindrance to the market.

On account of an individual country, Saudi Arabia dominates the market for construction equipment, and the UAE, which was following the dominating country, is likely to show a decrease in the market share. The collection of the smaller countries considered together amounts to more than half of the region's share, while the major countries of Qatar and South Africa each contribute more than 10% of the market share in the forecasted period. Based on the application, earth moving equipment rules the market, attributable to the constantly improving need for residential and commercial buildings, supported by the infrastructural development, which is attracting many private investments. Nonetheless, with African countries' pressing need for transportation network development, the concrete and road machinery markets will be a profitable segment in the region.

While the earthmoving machinery segment is expected to show a decline in market share, material handling machinery is expected to grow in the forecasted period. 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 middle-class population, increased foreign investment, and other factors have contributed to this. Saudi Arabia, the United Arab Emirates (UAE), 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.

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 has increased over the last few years. With the growing urban and rural population, housing needs, and rapid diversification of the region’s business from the in-house giant oil and gas industry to tourism and other sectors, the demand for construction activities in the region for residential, industrial, and commercial buildings has increased in the past.

Most global economies have set their sights on the African construction industry. This is due to the addition of benefits and advantages such as the availability of vast natural resources, massive investment opportunities in energy and infrastructure, low-cost labor, and a rapidly rising consumer market. There is also a good business environment, which includes policies that promote economic development. Thus, various ongoing projects and future projects that are being initiated by the governments in the Middle East and African regions to improve infrastructure are creating a demand for construction equipment, which will propel the growth of the market during the forecast period.

The Middle East construction equipment market is likely to witness moderate growth, primarily driven by government initiatives towards new development projects such as the expansion of metro networks and airports as well as the construction of smart cities, shopping malls and hotels in the region. Additionally, the recovery of oil prices has resulted in growth in the construction sector with increased infrastructure spending in major cities such as the UAE and Qatar for upcoming events such as Dubai Expo 2020 and FIFA World Cup 2022. These factors will further spur the growth of the construction equipment market in the Middle East region.

Mobile cranes and earthmoving equipment dominate the overall Middle East construction equipment market share due to their wide application at construction sites for excavation and lifting heavyweights. Additionally, the construction application segment is likely to witness a substantial rise as a result of numerous upcoming infrastructure projects in the region over the coming years. The demand for machines that are cost-effective, along with regulatory pressure for lower emissions, is pressuring construction-equipment manufacturers to opt for electric and hydraulic machines over the traditional hydraulic and mechanical ones. Thus, various ongoing projects and future projects that are being initiated by the governments in the Middle-East and African regions to improve the infrastructure will create a demand for construction equipment which will propel the growth of the market during the forecast period.

Recent Developments

• In June 2022, Caterpillar announced that its Saudi dealer Zahid Tractor had been selected as the main contractor to supply power solutions that deliver 32 MW of prime power for one of the kingdom's most ambitious developments.
• In March 2022, the Volvo Construction Equipment company launched its EC550E crawler excavator in the Middle East. The excavator is designed to work on large infrastructure projects with high production levels.
• In June 2021, Liebherr launched the 205 EC-B 10 flat-top crane capable of lifting up to 2,100 kg at its head with a jib length of 65 m. The crane can operate with its maximum load capacity of 10,000 kg at full jib length with a radius of up to 18 m.
• In March 2021, Volvo Construction Equipment launched a 7-tonne compact excavator for the Middle East and African markets. The EC75D features Volvo’s D3 diesel engine, delivering 44.4kW of power and reduced fuel consumption. With a maximum reach of 6.3m and a digging depth of 3.8m, the high-strength tensile steel boom of the EC75D is fixed to the side of the cab for improved stability and visibility of the job site.

COVID-19 Impacts:

The COVID-19 outbreak is expected to have a significant impact on the Middle East and African economies, leading to a decline in oil production, tourism, and remittances. The construction sector of the region was in a vulnerable situation with high chances of a fall in demand for housing and commercial units. As the demand for technologically advanced equipment has picked up a pace around the region, the market is known to be prone to various challenges, which have emerged as a huge hurdle in the way of growth. As the governments try to improve the living standards of the regions, they also take into account the preservation of the environment by laying down a growing list of environmental regulations. Sustainable buildings, eco-friendly structures, improved air quality, and a reduction in emission rate have become top concerns of the government with a primary focus on feasible development. It is to influence the heavy machinery manufacturers to concentrate on cleaner and greener production soon.

Major companies present in the market

Caterpillar Private Limited, CNH Industrial, Doosan Infracore, Epiroc Construction Machinery Co. Ltd, Hitachi Construction Machinery Co. Ltd, J C Bamford Excavators Ltd, John Deere Ltd, Kobe Steel Ltd, Komatsu Ltd., Kubota Corporation, Liebherr Group, Metso Corporation, Sandvik Mining And Rock Technology, Sany Group, Terex Corporation, Volvo Construction Equipments, XCMG Ltd., Zoomlion Co. Ltd

Considered In the Report

• Geography: Middle East & Africa
• Base year: 2021
• Historical year: 2016
• Estimated year: 2022
• Forecasted year: 2027

Countries covered:

• Saudi Arabia
• UAE
• Qatar
• South Africa

Aspects Covered In the Report

• Market Size By Value for the historic time period (2016-2021)
• Market Size By Value for the forecast time period (2021-2027)
• Market Share by Application (2016, 2021 & 2027F)
• Market Share by Equipments (2016, 2021 & 2027F)
• Market Share by Country (2016, 2021 & 2027F)
• Market Share by Company (2021)

Segments covered in the Report

By Application

• Earth Moving Machinery
• Material Handling Machinery
• Concrete and road construction Machinery
• Other Machinery

By Earth Moving Machinery

• Excavators
• Loaders
• Dozers
• Motor Graders

By Material Handling Machinery

• Dumper /Dump Truck/ Tippers
• Cranes (Tower Crane, Mobile Crane)
• Telescopic Handlers
• Forklift

By Concrete and Road Construction Machinery

• Cement/Transit mixers
• Compactors & Road Rollers
• Pavers/Asphalt Finishers
• Others

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the construction machinery and excavator industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.