Sectoral Capsule - Construction Equipment Market in Indonesia
Driven mainly by the Asian markets, the global construction equipment industry has recovered considerably from a downturn in 2009. It registered revenues of USD 87 billion in 2012, as against USD 82 billion in 2011. The market is estimated to clock revenues worth USD 97 billion in 2013. Rapid urbanization and the resultant growth in construction, the emergence of lease-based equipment and brisk mining activity on increased government investment in infrastructure development has led to the recovery and growth of the global construction sector.
Owing to strong economic growth, coupled with a high level of investment over the past decade, the construction sector in Indonesia registered significant growth in 2013. The construction sector in Indonesia has been the major beneficiary of the rise in investment activity. It clocked average annual growth rate of 7.4 percent over the last 10 years - way above the GDP growth rate of 5.9 percent. The earth moving and tunneling equipment and the mining equipment segments together account for the major share of the construction equipment market pie. With the infrastructure sector poised to register the highest growth rate in 2014, these two segments are expected to be stimulated further.
Indonesia is a global mining hub with large volumes of export commodities such as coal, copper, tin and nickel. The mining sector is one of the driving forces of the economy and accounted for 18 percent share of the GDP in 2012. Heavy investment in infrastructure, aggressive government initiatives, residential boom, growing income levels and a large middle class population would contribute to the rise in construction demand in Indonesia. The country’s construction equipment sector is set to grow rapidly in the near future.