Cranes are the most obvious sign of the booming construction sector. But the bulk of equipment in demand in the region – excavators, loaders and trucks – is less visible. ‘Business in the Gulf has been good in 2004 and even better in 2005 so far,’ says Kjell Carlsson, vice-president for sales and marketing at Swedish vehicle manufacturer Volvo. ‘Saudi Arabia, the UAE and Oman are all doing very well. And for our company, business in Qatar is now really starting in a big way.’

The picture looks similar at South Korea’s Doosan Infracore, which earlier this year acquired Daewoo Heavy Industries, another plant manufacturer. ‘Business has been very good in the past 12 months,’ says WS Choi, head of Middle East sales at the company’s construction equipment business group. ‘Our sales have increased by 40 per cent between mid-2004 and June this year. Most of the demand comes from Bahrain, Iran, Saudi Arabia and Turkey.’

According to a recent report by South Korea’s Hyundai Heavy Industries (HHI), which received world-wide orders worth $1,120 million last year and for which the Middle East is a core market, the positive trend is unlikely to change in the near to medium term. ‘The sales outlook for the Middle East appears bright as recent oil price hikes are stimulating construction activities. HHI aims to increase its sales there by more than 20 per cent in 2005. Sales in Turkey, which doubled in 2004, are expected to increase steadily this year, given brisk demand for large-sized equipment and spare parts.’

Demand

Despite the impressive growth rates, the world’s two biggest construction equipment suppliers, Caterpillar of the US and Japan’s Komatsu, continue to dominate the regional market in terms of sales.

However, most international manufacturers are present in the market, most of them focusing on a particular market segment rather than offering their whole product range. Komatsu and Caterpillar are the key suppliers of general equipment. Volvo’s core business remains wheeled loaders – although demand for other products, such as excavators, is taking off too, according to Carlsson. Doosan Infracore and HHI are major suppliers of excavators, and the UK’s JCB is a major supplier of backhoe loaders.

Industry estimates put the Middle East’s market share, including Turkey, at somewhere between 5-10 per cent of global sales, which stood at about $49,000 million in 2003. Demand for construction equipment in the Gulf alone is estimated to grow by 5-10 per cent a year, with Saudi Arabia being among the fastest growing markets.

‘According to our estimates, about 3,000 units of construction machinery – not including skid steer loaders – were sold in Saudi Arabia in 2004,’ says a construction equipment dealer in the kingdom. ‘This year we expect this figure to be 10 per cent higher.’ Demand for heavy construction equipment could receive yet another boost if the long-awaited development of the kingdom’s mining sector goes ahead as scheduled in the next 12-18 months. The large-scale scheme, which is presently under planning by Saudi Arabian Mining Company (Maaden), would require significant volumes of specialist equipment for exploiting the country’s phosphate and bauxite reserves.

The Gulf is not the only region where demand for construction equipment is soaring. After years of moderate growth, indications are that sales are picking up elsewhere in the region. ‘We see a general