Dublin, March 20, 2024 (GLOBE NEWSWIRE) -- The "Philippines Construction Equipment Rental Market - Strategic Assessment & Forecast 2024-2029" report has been added to ResearchAndMarkets.com's offering.
The Philippines construction equipment rental market was estimated at 175.9 million in 2023 and is expected to grow at a CAGR of 5.06% from 2023-2029.
In December 2023, the National Irrigation Administration(NIA) allocated PHP776 million (USD 13.9 million) worth of excavators to irrigators' associations, part of a PHP2.59 billion (USD 0.05 billion) initiative to enhance irrigation systems over three years. The program aims to repair and construct facilities damaged by natural disasters, with tranches involving heavy equipment procurement. This effort targets improving national and communal irrigation systems to boost farmer productivity and profitability while driving demand for earthmoving machinery rentals in government-led projects in the Philippines construction equipment rental market.
The Davao City Bypass Construction Project Package II-1 is a major infrastructure project in the Philippines involving the construction of two 2.3-kilometer tunnels, expected to be the longest in the country. These tunnels will be unidirectional, with one tunnel for northbound and the other for southbound traffic. An 8.4-kilometer main road will connect the tunnels, incorporating various bridges and other structures. The project is anticipated to be completed in 2028.
The Department of Environment and Natural Resources (DENR) plans to prioritize government-led mineral exploration in 2024, with the Mines and Geosciences Bureau (MGB) taking the lead. This initiative will receive technical support from foreign partners like the Australian government and the US Geological Survey. The DENR also promotes mineral processing for minerals, including nickel, iron, cobalt, and rare earth minerals.
Manitou's Ecostop feature automatically shuts down the engine and hour meters based on a preset timer. Caterpillar's new D series skid steer loaders integrate the Cat Intelligent LevelingT system, offering industry-smart features. Hitachi Construction Machinery developed ConSite Mine, utilizing IoT and AI-based analysis to remotely monitor mining equipment operations 24/7, addressing site issues promptly. Monark Equipment Corporation, Tadno's Philippines distributor, expanded its distribution offerings to TADANO's Cargo Cranes.
Caterpillar, Komatsu, Volvo CE, Hitachi Construction Machinery, XCMG, and SANY are leaders in the Philippines construction equipment rental market. These companies have strong market share and offer diverse sets of equipment.
JCB, Kubota, Kobelco, Zoom Lion, and Sumitomo Construction Machinery are emerging in the Philippines construction equipment rental market. While Bobcat, Tadano, Takeuchi, Yanmar, Manitou, CNH Industrial, and Terex are niche market players. These companies offer low product diversification and have a strong presence in the Philippines's local market.
MARKET TRENDS & DRIVERS
Need of Construction Equipment in Natural Calamities to Push the Rental Demand
In 2023, the Philippines experienced various natural hazards that affected over 13.7 million individuals, marking a challenging year for the nation. Despite a below-average number of tropical cyclones entering the Philippines Area of Responsibility (PAR), the year has witnessed heightened southwest monsoon and shear lines, triggering heavy rains and subsequent floods and landslides in various regions.
Following disasters such as hurricanes, earthquakes, or floods, demand for heavy machinery for debris removal, infrastructure repair, and reconstruction efforts is typically a surge in demand for heavy machinery. This heightened demand often leads to temporary shortages of available equipment in affected areas, resulting in increased rental rates. The consequences of these natural disasters extend beyond immediate humanitarian concerns, impacting various sectors, including the Philippines construction equipment rental market.
Flood Mitigation and Adaptation Projects to Increase the Demand for Rental Equipment
In 2023, the Philippines experienced various episodes of flooding, each with distinct levels of severity and consequences. In January 2023, flooding, landslides, and strong winds affected numerous regions, impacting thousands of individuals due to the convergence of low-pressure areas. In anticipation of future challenges, the government has proposed a budget of USD 3.8 billion for flood mitigation projects in 2024. Additionally, the Metropolitan Manila Development Authority (MMDA) has allocated USD 0.02 billion in its 2024 budget for flood management infrastructure.
Infrastructure Flagship Projects Nationwide Are Expected to Propel the Philippines Construction Equipment Rental Market
The new Infrastructure Flagship Projects (IFP) list comprises 194 projects, ranging from unfinished initiatives from previous administrations to major priority projects submitted to NEDA for inclusion in the Public Investment Program (PIP) 2023-2028 and the Three-Year Rolling Infrastructure Program (TRIP) FY 2024-2026.
Further, the allocation of IFPs varies across government agencies in terms of quantity and expenditure. The Department of Transportation (DOTr) leads with the highest number of IFPs at 71, followed by the Department of Public Works and Highways (DPWH) with 58 and the National Irrigation Administration (NIA) with 28.
Transition to Hydrogen Fuel to Achieve Net-Zero Target
The Philippine Energy Plan 2020-2040 underscores hydrogen's importance as an alternative fuel for power generation, aiming to diversify fuel sources, reduce greenhouse gas emissions, and increase renewable energy utilization. Discussions internally focus on classifying hydrogen and establishing national policies to govern its usage. In 2022, the Department of Science and Technology inaugurated the country's first hydrogen fuel cell research and testing center. This center is essential for developing hydrogen fuel cell technology, which focuses on creating locally sourced prototype fuel cells. The aim is to enhance the accessibility and sustainability of hydrogen technology within the Philippines.
Progressing Toward Net Zero Prompts the Adoption of Electric Construction Machinery
Leading rental companies like Loxam, Kiloutou, Boels Rental, and Sunbelt Rentals are spearheading the adoption of electric machines, placing orders for thousands of battery-powered units, formerly diesel-fueled. This trend mirrors global markets like the US, the UK, and Japan, indicating a similar shift in the Philippines. While the Philippines government has not set plans for net-zero emissions, some construction firms in the Philippines construction equipment rental market are pursuing this goal independently. Co-organized by the Net Zero Carbon Alliance (NZCA) and Eco-Business, an event drew 200 delegates from various sectors, including construction, manufacturing, energy, etc., aiming to achieve net-zero emissions by 2050.
INDUSTRY RESTRAINTS
Supply Chain Disruptions to Hamper Rental Construction Market
- The Philippines relies heavily on imported construction equipment from China, Japan, and Europe. Geopolitical disturbances in these regions have posed challenges and disrupted the market's growth trajectory in recent years.
- Trade tensions, diplomatic conflicts, and supply chain disruptions from geopolitical instability have led to delays in equipment procurement, increased costs, and uncertainty for businesses operating in the construction sector.
- The consequences of Typhoon Odette in 2021 resulted in 36% of seaports being non-operational, leading to significant logistics hurdles and disruptions in supply chains, particularly for remote islands.
Skilled Labor Shortage in the Philippines Construction Industry
- The construction industry in the Philippines, particularly in Cebu, faces a severe shortage of skilled workers, prompting contractors to explore innovative solutions to address the growing gap. President of the Cebu Contractors Association (CCA) Inc. highlights the pressing issue, noting that the shortage has become a nationwide crisis affecting project bidding, completion timelines, and meeting post-pandemic demands.
- Construction firms embrace technological advancements to mitigate labor shortfall, including integrating artificial intelligence (AI) into their operations. Automation has increased efficiency and productivity, reducing the manpower required for specific tasks while maintaining output quality.
- The role of technology in streamlining operations, such as the reduced workforce needed to operate crane units, will be beneficial. However, despite technological innovations, labor costs remain high in Cebu, leading contractors to source workforce from other regions in the Visayas and Mindanao.
KEY QUESTIONS ANSWERED
- How big is the Philippines construction equipment rental market?
- What is the growth rate of the Philippines construction equipment rental market?
- Who are the key players in the Philippines construction equipment rental market?
- What are the trends in the Philippines construction equipment rental market?
- Which are the major distributor companies in the Philippines construction equipment rental market?
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 171 |
| Forecast Period | 2023 - 2029 |
| Estimated Market Value (USD) in 2023 | $175.9 Million |
| Forecasted Market Value (USD) by 2029 | $236.5 Million |
| Compound Annual Growth Rate | 5.0% |
| Regions Covered | Philippines |
Prominent Vendors
- Caterpillar
- Komatsu
- Liebherr
- JCB
- Volvo Construction Equipment
- Hitachi Construction Machinery
- Kubota
- SANY
- Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
- Kobelco
Other Prominent Vendors
- CNH Industrial
- Bobcat
- Liebherr
- Manitou
- Shandong Lingong Construction Machinery (SDLG)
- Mecalac
- Tadano
- Yanmar
Rental Companies
- Hastings Motor Corporation
- Mayon Machinery
- FEL-SAN Construction Equipment Rental
- Guzent
- Royal Cargo
- ZL Machinery
- Alibaton
For more information about this report visit https://www.researchandmarkets.com/r/41mq35
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