Malaysian Construction Equipment Industry Forecast to 2015
Of all equipment categories, concrete equipment is expected to experience the strongest growth during the forecast period, while other categories will also experience strong growth.
Construction equipment industry overview
In 2009, the turnover of the construction equipment market stood at US$246.4 million following an annual decline of over one-third. This was due to a fall in domestic consumption during the recent global financial crisis and a fall in demand in major export destinations, such as the US. However, the construction equipment market is expected to improve throughout the forecast period as a result of government stimulus packages.
A feature of these stimulus packages is increased infrastructure spending, which will boost demand for construction equipment from government contractors. By 2015, the Malaysian construction equipment market is expected to be worth almost US$470 million.
Increased domestic infrastructure expenditure
To counteract the negative effects of the recent global financial crisis on its economy, the Malaysian government announced a stimulus package worth US$2.0 billion, approximately 1.0% of its GDP, in November 2008. The construction industry received a major share of this package, as the government plans to construct 25,000 low- and mid-income housing units and upgrade police stations, army camps and living quarters, schools, hospitals, roads in rural areas and other public amenities such as community halls and bridges.
Communications infrastructure also received a significant share of the investment package, as the government is keen to encourage a knowledge-rich economy. Increased infrastructure spending will boost demand for construction equipment from government contractors. Following this other stimulus packages have been announced by the Malaysian government, further expected to impact the construction equipment industry.
Dependent on imports
The Malaysian construction industry is largely dependent on imports of construction equipment, despite its relatively well-developed domestic manufacturing industry. Between 2005 and 2008 equipment imports accounted for approximately three-quarters of overall consumption until 2008, before reaching a high of over 80% in 2009.
The Malaysian construction equipment market consists of both domestic manufacturers and major foreign companies. While certain foreign firms, such as Hitachi and Volvo, have joint ventures and subsidiaries in the country, others have market presence only through dealerships and distributors. The leading manufacturers in the Malaysian construction equipment market include Caterpillar (Tractors Malaysia), Favelle Favco, Hino, Hitach, Isuzu, Kobelco, Kato, Nissan and Sumitomo.
Concrete equipment to experience the strongest growth
The concrete equipment category is expected to experience the strongest growth in the Malaysian construction equipment sector from 2010-15, at a CAGR of almost 18%. Material handling equipment, earth moving equipment, road construction equipment and construction vehicles will also experience strong growth.
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