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Kuwait Construction Equipment Market - Outlook and Forecast 2022-2028
Construction equipment refers to specially designed machinery that is utilized for various construction operations. It is anticipated that the Kuwait construction equipment market share by units will reach 7,383 by 2028. The growth in this market is primarily driven by increased government investment in infrastructure and renovation projects, the demand from the oil sector, and Kuwait’s plans to expand its power generation capacity through wind and solar parks.
The outbreak of Covid-19 had a significant impact on the Kuwait construction equipment market in terms of cost. This was mainly due to a surge in construction material prices, labor shortages, and increased transportation expenses. The price of materials increased as international producers raised their export prices during the importation crisis caused by the pandemic.
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USD 450 Mn incremental growth between 2021 and 2026
Type and End User
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Within the Kuwait construction equipment market, the earthmoving segment holds the largest share. Excavators, in particular, accounted for the largest share within the earthmoving segment in 2021. The increase in civil engineering and housing projects in 2021 is expected to drive the demand for excavators in Kuwait.
Furthermore, in 2021, the Kuwaiti government increased its investment in energy and climate infrastructure projects. The government has also shifted its focus towards renewable and nuclear energy resources, with plans to invest $20 billion in upgrading the renewable energy industry by 2030. The surge in renewable energy projects is driving the demand for excavators and cranes in the Kuwait market.
Increased government investment in warehouse and logistics infrastructure is supporting the growth of Kuwait’s logistics and transport industry in 2021. The growing logistics and warehouse industry is creating significant demand for forklifts in the Kuwait market.
It is predicted that the economic activity in Kuwait will return to pre-pandemic levels by 2023. The Kuwaiti economy is expected to grow by 5.8% in 2022 and approximately 3.8% in 2023, driven by the growth of the construction, oil, and gas sectors.
In 2022, Kuwait approved over $60 billion for infrastructure, health, environment, and power projects, with 5% of these projects involving partnerships with the private sector. These projects include 14 major public projects valued at around $59 billion, as well as four partnership projects worth nearly $3.2 billion. The projects encompass various initiatives such as airport expansion, the development of Silk City, a trans-Kuwait rail network, rail links with nearby Gulf countries, Malta City, and the Clean Fuel Project. Collectively, these projects are expected to contribute 2.5% to the country’s GDP.
Additionally, Kuwait has allocated $6.8 billion for the development of the residential project South Saad Al Abdullah Town, along with the renovation of the historic marketplace Souq Al Mubarakiya. The real estate sector in the country is expected to experience strong growth due to government investments in long-term developments, including the expansion of South Saad Al Abdullah New City.
The surge in real estate and public infrastructure projects is driving the demand for tower cranes in the region. For example, Chinese firm First Group Company was awarded a $227.2 million contract for housing projects by Kuwait’s Public Authority for Housing Welfare in 2021. To construct Kuwait International Airport’s new terminal, eight large tonnage flat-top tower cranes were exported from China by Zoomlion. Other major original equipment manufacturers (OEMs) in the region, such as XCMG, Liebherr, Hyundai construction machinery, and SANY, are expected to upgrade their existing tower cranes to meet the growing demand in the region.
The Kuwaiti government has planned to invest $65 billion in infrastructure projects, including health, power, road, and railways. Funding for the housing sector has also been increased, with various housing renovation projects planned, such as the Souq Al Mubarakiya region. A major railway project is scheduled to link all six member states of the Gulf Council in Eastern Arabia, with an estimated value of $250 billion and a completion date set for 2023. Moreover, redevelopment projects such as the expansion of Kuwait International Airport, worth $4,265 million, are currently underway in 2022. These significant government support measures have contributed to the growth of the Kuwait construction equipment market. Additionally, the government plans to improve road connectivity across the country to facilitate fast transit.
The government’s Waste Management Strategy Program is expected to have a positive impact on the demand for excavators. In 2021, the Kuwait government invested $147.9 million in waste management. Establishing an effective waste management system is crucial for the circular economy, as it improves waste recycling and resource recovery, reduces solid waste, and promotes efficient use, reuse, and repair.
The government plans to develop similar waste management facilities in multiple locations under the waste management strategy program. This is expected to further drive the growth of the Kuwait construction equipment market, particularly in terms of demand for excavators and loaders used for waste handling.
Building material prices in the country’s market have been continuously rising. In 2020, building material prices increased by 5%, but in 2022, they surged by over 25%. The increase in building material prices has had a negative impact on Kuwait’s real estate sector. For example, the prices of iron, steel, cement, and wood increased by 28% in 2022, significantly affecting new residential projects like Mutlaa and West Abdullah Al-Mubarak.
The market is segmented based on various factors, including type and end user.
Segmentation by Type
Earthmoving Equipment – Excavator, Backhoe Loaders, Motor Graders, Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers)
Material Handling Equipment – Crane, Forklift & Telescopic Handlers, Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)
Road Construction Equipment – Road Rollers, Asphalt Pavers
Segmentation by End Users
In 2021, the earthmoving equipment segment dominated the overall construction equipment market in Kuwait, accounting for 50.8% of the market share. It is projected that by 2028, this segment will reach a total of 3,863 units, exhibiting a compound annual growth rate (CAGR) of 6.03%. The earthmoving equipment segment held the largest market share within the Kuwait construction market in 2021. This can be attributed to government investments made under the Kuwait National Development Plan 2035, which aim to support the demand for earthmoving equipment. The Kuwait Vision 2035 initiative, initiated by the government, has set a goal to transform Kuwait from being solely reliant on petroleum to becoming a financial, logistics, and trade hub by the year 2035.
Furthermore, the construction equipment end-user industry accounted for 53.8% of the overall market in 2021. It is anticipated that by 2028, this industry will witness a significant growth to reach approximately 4,222 units, with a CAGR of 6.52%. The Kuwait government plans to invest around $9.2 billion as part of the Kuwait National Development 2035 Plan. This investment aims to facilitate the construction of essential infrastructure such as roads, railway lines, airports, and public utilities outlined in the plan. According to national government statistics, the sector is expected to grow at a rate of 6% in 2022.
In the Kuwait construction equipment market, Zoomlion, Hyundai Construction Machinery, Liebherr, and Caterpillar hold the position of market leaders, collectively accounting for 24.7% of the market share in 2021.
Hitachi Construction Machinery is focused on expanding its sales of mining machines in the region due to the high availability of hard rocks such as iron ore, copper, and nickel. Additionally, the company is strengthening its research and development efforts and providing training to its employees to ensure excellent service delivery to customers.
Caterpillar has recently acquired Tangent Energy Solution, a US-based energy-as-a-Service (EaaS) company. This acquisition aims to help reduce energy costs, improve energy efficiency, minimize emissions, and provide operational resiliency for its customers.
Kobelco is prioritizing the use of automation and digitalization in its product offerings to enhance productivity for construction workers. The company specializes in manufacturing excavators, cranes, and spare parts for construction equipment.
Other prominent vendors in the Kuwait construction equipment market include Hitachi Construction Machinery, Liebherr, Caterpillar, Zoomlion, XCMG, SANY, Hyundai Construction Equipment, Volvo Construction Equipment, JCB, and Kobelco.
Key Questions Answered
What is the rate of growth for the construction equipment market in Kuwait?
What is the projected number of units of construction equipment to be sold in Kuwait by 2028?
What will be the size of the construction equipment market in Kuwait by 2028?
Who are the major players in the construction equipment market in Kuwait?
What are the current trends observed in the construction equipment market in Kuwait?