The global market for mining and oil and gas field machinery manufacturing reached $265 billion in 2016, and is anticipated to reach $324.1 billion in 2020 at a compound annual growth rate (CAGR)of 5.2%.
According to a BCC Research report, the growth is driven by high demand and expanding hydraulic fracturing sector, as well as mounting pressures to reduce cost and improve quality.
The Asia-Pacific region is home to the largest market for mining and oil and gas field machinery manufacturing and accounts for nearly a quarter of the industry. While the Middle East trails the Asia-Pacific region, Africa is expected to see the fastest growth in the market, with a CAGR of 6.5%.
The world’s largest market segment in terms of value is found in China, which is expecting a 4.7% CAGR. China is now the world’s largest producer and consumer of coal.
The market benefitted from low interest rates between 2012 and 2016, which created a flow of cheap investment money both in developed and developing countries. Low interest rates also encouraged borrowing and discouraged saving, which helped to drive markets.
“Globally, the rapid growth in shale oil production we’re expecting to drive growth of the oil and gas field machinery manufacturing market,” said BCC Research Senior Editor Gordon Nameni. “According to PwC, shale oil production has the potential to reach almost 12% of the world’s total oil supply by 2035.”
Even though strong growth is on the cards, a number of factors are conspiring to restrain this development in the global market.
Mining companies are increasingly turning to rented and leased equipment, which has the advantage of offering the latest technology without the need to make a major capital investment. Additionally, global trade restrictions are affecting growth, as is the concern with global warming where many nations are promoting investments in renewable energy in favour of additional development in the oil and gas industry.