Oman Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

INDUSTRY INSIGHTS

The Oman construction equipment market size was valued at 2,015 units in 2022 and is expected to reach 2,775 units by 2029, growing at a CAGR of 4.68%. Under the “Oman’s Vision 2040” program, the government focuses on diversifying the economy, which depends on the oil & gas sector. In 2021, the government announced 130 projects mainly enabling manufacturing, tourism, logistics, labor market, business environment, fisheries, energy, and mining sectors. Oman's government is investing in infrastructure development projects, including expanding airports, railway lines, roadways, and highways across the country. The surge in infrastructure development projects is expected to drive the growth of the Oman construction equipment market during the forecast period.

KEY HIGHLIGHTS

• Earthmoving equipment accounted for the largest market share in the Oman construction equipment market in 2022. Excavators in the earthmoving segment accounted for the largest share. Rising investment in housing, warehouse expansion, and public infrastructure projects is expected to drive the demand for excavators in the market.
• In December 2021, the government opened a new road through the Empty Quarter connecting Riyadh with Muscat and other major Omani cities, including Duqm and other Omani ports. Oman is fully focused on expanding its bus and private taxi systems. In addition, several transport projects are underway across regions in Oman.
• In May 2022, Oman’s Public Establishment for Industrial Estates announced 30 consultancy works and infrastructure projects distributed over 11 industrial cities across the Sultanate at a total cost of over USD 518 million. The company also attracted 130 industrial, commercial, and service projects in 2022.
• Oman Power and Water Procurement Company (OPWP) announced its plans to build solar and wind projects in 2023, which expects to generate 13% of electricity by 2025. These projects are projected to support the Oman construction equipment market. The company has plans to develop a 100 MW capacity wind-based IPP at Aalan Bani Bu Ali in North Al Sharqiyah Governorate. In Duqm, on Oman’s southeast coast, OPWP has plans to develop a pair of wind IPPs with a combined capacity of around 360 MW.
• The UAE-Oman rail link was launched in Sept 2022, which will boost trade & tourism opportunities between the countries and with Gulf Cooperation Council (GCC) countries. Passenger and freight lines will be developed as part of the network. The 303 km line will majorly link Sohar to Abu Dhabi. However, the government anticipates the project's growth will be sluggish with the derailed oil prices in 2023.

Increased Investment in Public Infrastructure Projects

• The Oman Airport Company included the Khasab Airport project 'Phase One' in the tenth five-year plan (2021-2025). With this project, the government aims to attract 1.2 million tourists annually by 2040 to the governorate. The first phase will develop the airport network alongside Muscat, Salalah, Sohar, and Duqm airports.
• In November 2021, Oman Investment Authority announced the opening of 13 national projects valued at approximately USD 9.09 billion. The projects cover several key sectors: energy, food security, manufacturing, mining, health, and tourism.
• In Nov 2022, the former US president’s family business signed a USD 1.6 billion deal with Saudi real estate developer Dar Al Arkan to build a resort in Oman. The resort will include 3,500 new homes, two hotels comprising 450 rooms, and a golf course.
• In Feb 2023, the MoU was confirmed for Saudi investment in Oman’s infrastructure sector. The Saudi Fund for Development (SFD) financed a USD 319.8 million infrastructure project for the Sultanate's Al Dhahirah Special Economic Zone. The project is expected to stimulate sustainable economic growth, support increased trade exchanges, and create quality industries. 
• In Dec 2022, the Municipality announced another rainwater drainage project in the Wilayat of Bausher in Muscat Governorate. The project involves constructing a 2000-meter open drainage canal in Ghubra, Bausher. The project intends to mitigate the risks of flash floods and enhance surface water drainage in that vital area.

MARKET TRENDS & DRIVERS

Oman’s Vision 2040 to Boost the Oman Construction Equipment Market Growth

• Oman’s Investment Authority (OIA), in Dec 2022, announced to spend USD 4.95 billion on investment projects in 2023. Therefore, the investments will include about 65 new and existing projects in logistics, food and fisheries, energy, mining, services, communications, and IT.
• Rakiza (Muscat-based infrastructure fund) granted over USD 1 billion, with 25% of the fund deployed in three Omani projects. Further, in Feb 2023, Saudi Fund for Development signed an agreement to invest in infrastructure development worth USD 320 million in Oman. The project includes the construction of infrastructure, roads, electrical installations, water and sewage networks, treatment of industrial waste, and the setting up basic facilities in the region.

Increased Water Infrastructure Projects in the Country Will Propel the Demand for Crawler Excavators

• In 2021, the Ministry established 12 artificial rain stations to enhance the rainfall, increasing groundwater levels. The government implemented dam projects, due to which the number of dams in Oman reached 174 by the end of 2021. The number of new permits issued in 2021 reached 1,274, including 876 for digging new water wells.
• Oman Water and Wastewater Services Co (OWWSC) is focused on completing three key notable water transmission schemes. Moreover, the Minister of Housing and Urban Planning launched Jabal Akhdhar Water Project worth USD 107 million in Feb 2023.

Robust Growth in the Real Estate Sector to Boost the Sales of Construction Equipment

• In 2022, the government opened five of Oman’s new sites for real estate developers in Musandam, Dhofar, South Al Sharqiyah, North Al Batinah, and South Al Batinah. The Al Naseem neighborhood project in Sorouh is among the first projects to be initiated, including 1,000 housing units with 320 apartments, 120 villas, and 475 twin villas on an area of 350,000 sq. meters.
• In Jan 2023, the Housing Ministry & Urban Planning signed eight agreements worth USD 390 million in real estate development and integrated service stations covering the Governorates of Muscat, North Al Batinah, and South Al Batinah.

Oman’s Shift Toward Hydrogen Fuel-Based Construction Equipment

• The country has signed agreements over USD 51 billion for Green Hydrogen projects. Moreover, Hydrom announced that it had signed six term-sheet agreements with several developers to invest in green hydrogen projects in the Sultanate of Oman.
• The “Hydrogen-Centric Economy by 2040” program, which is the shift towards hydrogen fuel-based construction equipment, has stimulated the demand for green hydrogen fuel-based equipment in the Oman construction equipment market.

Government’s Increasing Focus On Solid Waste Management Activities to Boost the Demand for Material Handling in the Region

• The Omani government recently shifted its focus to sustainable waste management strategies. In Nov 2022, the Oman Environmental Service Holding Company and the Oman Power and Water Procurement Company (OPWP) signed a memorandum of understanding to build a waste-to-energy (WtE) plant in Barka.
• Oman’s first e-waste recycling facility project was launched in Q1 2023. The facility covers an area of around 9,000-meter sq. and has a processing capacity of around 225 tonnes per annum. Rising waste management investments are expected to boost the demand for material handling equipment in the Oman construction equipment market during the forecast period.

INDUSTRY RESTRAINTS

The Decline in Oil Prices Hampers the Growth of the Oman Construction Equipment Market
According to government projections, energy prices are expected to remain high over half of 2023 and then gradually fall in the coming few years. Falling oil prices may drive Oman to curtail or postpone government investment, restricting the construction industry's expansion and resulting in lower demand for construction equipment. Recently, in Jan 2023, the oil demand from China (one of the largest buyers of oil from Oman) declined, which led to a fall in exports by 6.9%. This fall in exports decreased the oil prices in the country. Moreover, the Jan 2023 price remained lower than Dec 2022 when Oman crude averaged $90.8 per barrel.

The Skilled Labour Shortage in the Country Hampers the Pace of Construction Projects
According to the government, the demand for skilled labor surpasses the supply, and by 2030, it is projected that more than 85 million jobs could go unfilled. Moreover, the COVID-19 pandemic has greatly influenced and altered working methods, leaving a significant impact. According to the National Center for Statistics and Information, Oman's expatriate worker population fell by more than 270,000 from the end of 2019 to November 2020.

VENDOR LANDSCAPE

• Caterpillar, Volvo CE, Komatsu, Liebherr, Hitachi Construction Equipment, and XCMG are leaders in the Oman construction equipment market. These companies have a strong industry share and offer diverse sets of equipment.
• In 2019, XCMG hosted a new product release ceremony in Muscat, Oman, to introduce the new Middle East series, including cranes, truck cranes, crawler cranes, tower cranes, and aerial work platforms. 
• Kobelco, Liugong, Zoomlion, Yongmao, and HD Hyundai Construction Equipment are niche players in the Oman construction equipment market. These companies offer low product diversification and have a strong presence in Oman's local market.
• SANY, Liebherr, CNH Industrial & JCB are emerging players in the Oman market. These companies are introducing new technologically advanced products to challenge the industry share of Oman construction equipment market leaders.
• Tadano, Terex, Manitou Group, SDLG & Merlo Spa have low product diversification; these companies are lagging in adopting new technologies used in construction equipment.