The ongoing construction boom in Saudi Arabia is set to boost the demand for earthmoving equipment over the next six years which is projected to grow at a compound annual growth rate (CAGR) of 12.3pc, said a report.

Growth in construction activities has emerged as the major driver for the demand for construction equipment in the GCC region.

In construction market, amongst all GCC countries, Saudi Arabia is the largest contributing country, where rise in both public and private infrastructures can be witnessed, stated leading research firm 6Wresearch.

The high cost and ease of availability of earthmoving equipment on rent has spurred earthmoving equipment rental business, it added.

In 2014, excavator rental market accounted for majority of the market share in the overall market followed by construction tractor. However, excavator and loader markets are expected to grow at comparatively higher growth rates, said the report.

Sectors such as transportation, retail, hospitality, and energy are witnessing significant growth in the country. In 2014, western region accounted for major share in Saudi Arabia earthmoving equipment rental market followed by central region.

According to the report, the construction of high rise buildings and hotels in the regions had stimulated the market growth.

Cities like Makkah and Madinah would especially witness growth in number of new hotels. More than 77 per cent of hospitality investments in the Kingdom would be spent in the two cities only, the report added.

There are about 149 new hotels under construction in Saudi Arabia, which are driving the market for earthmoving equipment on rent in the country.

According to the report, Saudi government is planning to invest about $30 billion in tourism sector over the next eight years, which would drive the construction and expansion of road, rail, transportation, and airport infrastructures in the country, thus boosting rental equipment market.

Apart from construction application, mining is other major revenue generating application in earthmoving equipment rental market, it stated. The mining work in the oil and gas and metal segments has also added to the demand for equipment on rent, the report added.-TradeArabia News Service