Anticipated stabilization of crude oil prices along with bullish outlook towards construction and infrastructure sectors of Saudi Arabia to drive the country's construction equipment rental market
In 2015, Saudi Arabia emerged as the largest exporter of oil, globally. With GDP of around USD753 billion in 2014, the country's economy is largely dependent on revenue earned from the oil and gas sector. During 2003-2013, increasing oil production and growing oil prices translated into large fiscal surpluses, on the back of which, the country managed to lower its debts. However, slump in global oil prices, at a CAGR of over 16% during 2011-2015, impacted the economy of Saudi Arabia, thereby leading to decline in revenue earned by the government in 2015. The fiscal deficit of Saudi Arabia stood at around USD98 billion in 2015, which in turn led to downfall in the construction sector of the country. In 2016, the government trimmed down the country's infrastructure and transportation budget by 64% in comparison with 2015, thereby impeding the growth of construction sector of the country.
According to the TechSci Research report, "Saudi Arabia Construction Equipment Rental Market By Equipment Type Competition Forecast and Opportunities, 2011 - 2021", the Saudi Arabia construction equipment rental market is forecast to grow at a CAGR of 10.24%, during 2016-2021, on the back of government's endeavor to diversify the economy into the non-oil sector coupled with increasing customer inclination towards renting construction equipment, rather than buying, so as to overcome the burden of associated ownership costs, such as operating, transportation, regulatory certification fees, maintenance, etc. On account of anticipated growth in crude oil prices at a CAGR of over 7%, during 2016-2021, the country's economy is expected to witness revival, thereby leading to an increase in government spending on construction, infrastructure, mining and other related sectors. On account of consistent growth in public and private infrastructure development projects, surge in the country's construction equipment rental market is anticipated during the forecast period.
"Owing to the non-availability of transmission and distribution lines in various remote areas in the country along with easy availability of diesel gensets and lower diesel prices, Saudi Arabia construction equipment rental market was dominated by diesel genset segment. However, telescopic handlers segment is expected to emerge as the fastest growing segment due to their use in multiple applications in the construction sector. The construction equipment rental market of Saudi Arabia is cluttered with more than 50% of the market share held by small and medium sized rental companies, as of 2015. Few of the major construction equipment rental companies operating in Saudi Arabia are Bin Quraya Rental, Zahid Tractor and Heavy Machinery, ISDC Rental, Altaaqa Alternative Solutions Co. Ltd. and General Contracting Company," says Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.
"Saudi Arabia Construction Equipment Rental Market By Equipment Type Competition Forecast and Opportunities, 2011 - 2021" has evaluated the future growth potential of construction equipment rental market in Saudi Arabia and provides statistics and information on market structure, rental tariff, competitive scenario and upcoming trends and developments in Saudi Arabia construction equipment rental market. The report intends to provide cutting-edge market intelligence and help decision makers to take sound investment evaluation. Besides, the report also identifies and analyzes emerging trends along with essential drivers, challenges and opportunities available in construction equipment rental market in Saudi Arabia.