INDONESIA COMPACT CONSTRUCTION EQUIPMENT MARKET

Indonesia Compact Construction Equipment Market is estimated to attain a robust market CAGR in the years ahead owing to the increased government spending in Indonesian public infrastructure initiatives alongside the rising application of compact equipment across different sectors.

Major Indonesia Compact Construction Equipment Market Drivers and Emerging Trends

The Indonesia compact construction equipment market is propelled by infrastructure upgrade endeavors which involve renovating commercial buildings, enhancing airports and railway stations, repairing runways, and extending roadways and bridges. Infrastructure development investments which encompass housing schemes and transportation facilities further bolster the expansion of the construction industry. The government launched National Strategic Projects aimed at boosting economic growth, enhancing community welfare, and promoting regional development. The projects involve more than 200 initiatives spanning from toll road expansions to the construction of new airports as well as broadband network enhancements, with a cumulative value nearing USD 500 billion. Among these projects are 57 dams, 56 roads, 11 railways, 16 ports, 15 energy initiatives, twelve water and sanitation improvements, eight airports, 2 housing estates, nine irrigation systems, among others which collectively drives growth in the Indonesia compact construction equipment market.

There has been a fierce competition between Chinese and alternative OEMs in Indonesia’s marketplace. Competition among manufacturers in the market has intensified due to increased demand for Chinese OEMs which offer competitive pricing and accessible financing options. In 2022, Chinese manufacturing company SANY dominated 21 percent of the excavator segment market share as Chinese brands offer equipment priced 20% lower than their Japanese counterparts. China’s investments in Indonesia include the use of more than 500 SANY equipment units for the high-speed railway construction between Jakarta and Bandung. Various OEMs in the nation including Caterpillars, Komatsu, Kobelco, and others, are prioritizing enhancements in aftersales services by leveraging digital technology.

Indonesia’s mining industry is a major consumer of heavy equipment, yet compact equipment finds limited utility in mining ventures. Increased industrial activities in 2022 have driven up demand for nickel, tin, and coal, where initiatives like the Aquila and Obi nickel projects in North Maluku Province highlight the growing interest in mining projects.

Nevertheless, Indonesia compact construction equipment market analysis observe several challenges that can hamper its expansion and development, including the rising costs of building materials that can hinder progress in construction projects. The Indonesia’s government decision to increase oil and fuel prices is anticipated to affect several commodities including those in property and housing sectors as well as building materials like cement and bricks. Central Statistics Agency reported that construction project costs for bridges and ports saw a 9.6 percent increase while installation costs for water and communication center rose by 5.6 percent. Residential building project construction costs also experienced a 4.2 percent increase in the same year.

 Another challenge includes a shortage of skilled workers that can constrain industry expansion. Indonesia is grappling with a shortage of skilled labor which requires approximately 113 million competent personnel to drive economic growth in infrastructure and agribusiness sectors. The lack of available skilled workers will hinder advancement in these industries thus affecting the compact construction equipment market in the country.

Based on equipment type, the market can be segmented into mini excavators, compact wheel and skid steer loaders, among others. Mini excavators are expected to lead the market segment as they are crucial in lifting and transporting materials in the expanding construction projects across the country.

Based on end user, the market is categorized into construction, agriculture, mining, utility works, and others. Construction will dominate the market segment as the country is observing an expansion in infrastructure building activities which require compact construction equipment.

Several notable players within the market include Caterpillar, SANY, Kobelco, Komatsu, Hitachi Construction Machinery, among others.

Segments covered in the Report:

The Indonesia Compact Construction Equipment Market has been segmented on the basis of equipment, end-user industry and application. Based on the equipment, the market is segmented into backhoe loader, excavator, skid steer loader, telehandler, track loader, others. Based on the end-user industry, the market is segmented into metals & mining, construction, agriculture, others. Based on the application, the market is segmented into loading, excavation, materials handling, lifting & hoisting, others.

Market Segmentation

Indonesia Compact Construction Equipment Market by Equipment

• • Backhoe Loader
  • Excavator
  • Skid Steer Loader
  • Telehandler
  • Track Loader
  • Others

Indonesia Compact Construction Equipment Market by End-user Industry

• • Metals & Mining
  • Construction
  • Agriculture
  • Others

Indonesia Compact Construction Equipment Market by Application

• • Loading
  • Excavation
  • Materials Handling
  • Lifting & Hoisting
  • Others