Singapore Compact Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

MARKET OVERVIEW

The Singapore compact construction equipment market was valued at 2,292 units in 2022 and is expected to reach 3,322 units by 2029, growing at a CAGR of 5.45% during the forecast period. Various ongoing infrastructure projects, such as the expansion of airports, railway lines, and construction cycle pathways, are in progress in 2023. The government is also investing in various housing projects, especially in the Central region of the country, in 2023. The increasing investment in public infrastructure and a surge in semiconductor manufacturing are projected to drive the Singapore compact construction equipment market.

Rising Investment in Infrastructure and Warehouse Expansion Project

• In 2023, the construction industry of Singapore is expected to perform better than the previous year. The construction contracts awarded in 2023 have increased by nearly 8%. The high demand is generated from public sectors & residential sectors.
• In addition, several healthcare projects are in the pipeline, such as polyclinic in Khatib, Tampines North, Serangoon, Kaki Bukit, Tengah, and Yew Tee, to advance healthcare facilities in the country.
• Singapore’s total manufacturing output decreased 13.0% y-o-y in May 2023, despite output growth in the transport engineering sector at 28.4% and a rebound from the biomedical manufacturing sector at 4.4%.
• With the rise in E-commerce activities post-pandemic. There is a surge in demand for warehouse expansion projects in the region in 2023. For instance, Maersk began the construction of a new distribution center of more than 100,000 square meters in the Jurong West region in 2023.
• NEP Group's worldwide network is opening a new broadcast production facility in the northeast of Singapore to meet the growing demand for connected broadcast production solutions in Southeast Asian countries.

KEY HIGHLIGHTS

• Compact excavators accounted for the largest market share of the Singapore compact construction equipment market in 2022. Construction industry end-users accounted for the largest share of compact construction equipment in Singapore. The Sales of compact equipment grew sharply in 2021 post-pandemic, and the sales increased due to rising infrastructure investment & housing sector across the country.
• Investment in infrastructure development projects, including investment in housing schemes & transport facilities, supports the growth of the construction market.
• Singapore's E-commerce market witnessed growth in 2020. The market continues to grow in 2023 due to the rise in changes in customer buying patterns after the pandemic. Good performance of the E-commerce industry supports the growth of the warehouse & logistics industry in the region.
• The use of automated forklifts grew in the region, thereby propelling the Singapore compact construction equipment market growth. BALYO announces the successful installation of the world’s tallest automated forklift at Singapore Storage and Warehouse (SSW) in 2022. Singapore firm Goldbell's unit starts supplying autonomous forklifts to Katoen Natie in 2022. Further, BYD and ST Engineering jointly unveiled the Driverless Forklift in the region.
• Singapore has become a semiconductor manufacturing hub in the Southeast Asian region. Singapore-based semiconductor start-up Silicon Box has set up a USD2.65 billion factory in Tampines in 2023.
• The companies are expanding their business operations in the construction equipment rental segment in the region, therefore making rental companies the largest customers for compact equipment.

MARKET TRENDS & DRIVERS

Surge in Infrastructure Projects in Public & Private Sectors in 2023

• According to the Building & Construction Authority (BCA), the total value of construction projects in 2023 is in the range between USD 19.8 and USD 23.5 billion.
• The public sector attracts the highest demand, which contributes to nearly 60% of total construction demand in 2023. This is supported by pipeline projects of public housing and the Housing Development Board’s ramping up of Build-To-Order flats.
• Construction projects of Industrial and Institutional buildings are under progress, construction of water treatment plants, educational buildings, and community clubs. Civil engineering demand is expected to stay firm with ongoing MRT line construction & other infrastructure works.
• Private sector construction demand is projected to be between USD 8.0 and USD 9.5 billion in 2023. The residential and commercial construction projects are expected to grow in 2023.

The Rise in Port Expansion Projects Drives the Singapore Compact Construction Equipment Market
The ports of Singapore provide free trade service, which attracts imports from other nationals. Singapore’s port is strategically located at the crossroads of East-West trade channels and is connected to 600 ports in over 120 countries. Moreover, Singapore Port is one of the world’s busiest ports and also handles more than 625 million tons of cargo annually. In addition, the government is looking to expand this further when the Tuas Mega Port is completed in 2040. In 2022, the government planned to invest USD 14 billion to build the world’s largest automated port by 2040, having double the existing space, features of drones, and driverless vehicles.

Surge in Demand for Automation in Construction Equipment
Singapore depends on foreign laborers for construction and manufacturing industries. The pandemic disrupted the labor supply, and the government minimum pay guideline is adding more problems due to the rise in the overall cost of construction projects. This situation triggers the demand for automation in construction jobs, which will reduce labor dependency and enhance work safety and efficiency. Moreover, the demand for self-driving construction machinery that can perform repetitive tasks such as welding, pouring concrete, and demolition has surged in the Singapore construction industry in recent times. Thereby automated excavators are being used to carry out excavation and prep work with great precision in the Singapore market in 2023.

Rising Uses of Electric Compact Equipment in The Singapore Compact Construction Equipment Market
Singapore's government aims to achieve carbon neutrality by 2050, and there is a rising concern for environmental safety in the region. The government is investing in green warehouses and green building projects across the country. Further, the government will focus on the elimination of carbon emissions from various industries such as construction, mining, logistics, and manufacturing in 2023. Such factors have triggered the demand for electric-powered construction equipment in the Singapore compact construction equipment market. In 2023, Volvo Construction Equipment launched electric-powered compact equipment for the Singapore market.

INDUSTRY RESTRAINTS

A Surge in Building Material and Labor Costs Hampers Private Housing Sales

• According to The Building and Construction Authority, the Singapore Tender Price Index increased by 11.6% in 2022 as compared to 2021.
• The country’s construction industry was severely impacted by the COVID-19 pandemic over the last three years & is expected to witness the completion of most of the delayed projects in 2023.
• Disruption in the supply of raw materials & labor and rising inflation are the major challenges in the Singapore construction industry in 2023.
• Tender prices for the projects are expected to grow in 2023 due to increased costs of contractors and suppliers. The average prices of concrete & steel have increased by 14% and 10.1% respectively in 2022.

High Dependency on Foreign Labor Can Hamper Industrial Growth

• Singapore heavily depends on foreign laborers in the manufacturing, construction, and shipbuilding sectors. With Foreign nationals comprising one-third of the total workforce in Singapore, the country depends upon low-cost laborers from India, Bangladesh, and Singapore.
• However, the Singapore government has tightened the rules for the foreign labor work permit. The government has increased the minimum salary pay scale for foreign laborers. This step increases the hiring cost of foreign laborers in various industries.
• A surge in accident incidents at construction and manufacturing sites also impacted the country’s labor. The local workforce doesn’t want to join the labor force due to the rise in incidents of accidents at work sites.

VENDOR LANDSCAPE

• Caterpillar, SANY, Komatsu, Kobelco, & Volvo Construction Equipment are leaders in the Singapore compact construction equipment market. These companies have strong market share and offer diverse sets of equipment in the market.
• Manitou, Yanmar, JCB, Toyota Material Handling, Kubota, & Liu Gong are niche players in the Singapore compact construction equipment market. These companies offer low product diversification and have a strong presence in Singapore's local market.
• XCMG, Hitachi Construction Machinery, Takeuchi, & Hyundai Construction Equipment are emerging in the Singapore compact construction equipment market. These companies are introducing new technologically advanced products to challenge the market share of market leaders in the Singapore market.
• Sumitomo & CNH Industrials have low product diversification; these companies are lagging in adopting modern technologies used in compact construction equipment in the market.