Global Construction Equipment Market Outlook, 2027

Global Construction Equipment Market Outlook, 2027

The construction equipment market has been a vital part of the economy globally. These equipments not only helps in decreasing the time involved in the process, but also increases the efficiency of the process with less human intervention. Undoubtedly, these equipments are the most capital-intensive investments by the company. Yet, the construction companies are investing heavily in these equipments, in order to control the indirect cost in the long run. The worldwide rise in construction activity is anticipated to drive the demand for the construction equipment. Favorable government initiatives such as stimulus packages and lower housing rates that inclined consumers for new house purchases are key factors expected to drive market growth over the forecast period. However, supply chain and inventory concerns coupled with semiconductor shortages are likely to hinder the market growth over the next few years. In addition to that, increasing investments by governments worldwide for developing public infrastructure is one of the prime factors that is expected to drive the market growth over the forecast period.

According to the report, recently published by Bonafide Research, titled 'Global Construction Equipment Market Outlook, 2027’; the need for abrupt and flawless constructions has propelled the demand in the construction equipment market across the world. The overall global construction market was recorded around USD 147 Billion in the year 2021, owing to the increasing demand for the infrastructural construction worldwide. Further, the market is anticipated to reach nearly around USD 211 Billion, registering CAGR of more than 6% for 2022-2027. The report throws a light on various trends and the technological advancement in the market of construction machineries, which has influenced the sales of the equipment over the years. The higher productivity with optimum fuel usage is the prime factor that the customer looks for in such construction support equipments, as the investment made behind such purchase are high.

The dominating earthmoving machinery sector is expected to show a decline in the market share by the forecasted period, while the road construction equipment is expected to show a growth of more than 7%. While the developed countries are expected to increase in demand for the material handling machineries, the economically backward governments are to shift their concentration towards road transportation development, which would be a great support the economic boost. The pandemic is likely to leave the economic shaken and resulting into a fall of construction and the real estate industry. Moreover, the industry has been facing a shortage of skilled labors over the past few years. As the existing labor force is retiring due to the age factor, the industry is in struggle to fill up the positions. Even though these machineries are designed to meet the labor shortage, the operators need to be technically skilled enough to handle them.

In terms of regions, Asia has been the undefeated lead, with more than 35% of the market share. Historically, North America held the second position, which is likely to show a decrease in the share up to an extent of creating possibility of Europe taking over the position post the forecasted period. The smaller regions of Latin America and Middle East & African countries are likely to show an increase in the market share. Understanding the fact that an efficient road transport system is a pre-requisite for sustained economic development, the governments have taken in to consideration about mending the poor quality roads, giving more scope for the segment equipments to grow. On the other hand, the vertical expansion in constructions is to let the material handling machinery segment cover a market of more than 20%.

The rising popularity of electric construction equipment is expected to create new revenue streams for the OEMs over the next few years. This equipment are operated on batteries and offer various attributes such as lower maintenance, reduced noise, lesser vibration and provides greater convenience for laborers to operate on the field. They are currently at the nascent stage and are expected to gain momentum over the forecast period. OEMs such as AB Volvo, Caterpillar, and Komastu have already commercialized compact electric excavators and wheel loaders in the market. However, the high initial upfront cost is expected to be one of the bottlenecks for its adoption during the forecast period.

Electrification is shaping the construction equipment market and offering significant opportunities and design possibilities. Electrification has been increasing in most market segments such as cars, buses, etc., including construction equipment. This has been made possible as advanced technologies are increasingly mature and affordable as they are also increasing regulations on emissions that have changed the future of the construction equipment industry. Several cities around the world have announced bans on the use of diesel within city limits, impacting the operation of construction equipment in these cities. Also, stricter emission regulations are being implemented for heavy machinery and equipment on the global, regional, and local levels in China and European countries. The emission and noise-pollution standards implemented by these regulations can be easily overcome with the use of electric construction equipment. This offers opportunities for construction manufacturers for the introduction of electric variants of existing/new products in the market.

Rising commercial constructions, such as IT parks, shopping malls, and other government buildings, are driving the industry growth. Construction equipment possesses the ability to efficiently carry out heavy-duty works required in the construction sector, thereby boosting the market demand. The shifting focus of construction companies and building contractors toward the speeding up of construction operations without compromising safety & security will enhance the business expansion. Various governments, such as the UK, Brazil, Taiwan, New Zealand, and France, are focusing on improving their road and building infrastructures. These governments are heavily investing in various infrastructure projects to accelerate their economic growth. For instance, in September 2021, the UK Government announced to invest around USD 900 billion across private and public infrastructures in the next ten years. These developments will include pipeline constructions, renovation of school & college buildings, and the creation of around 425,000 jobs per year in the next few years.

The construction equipment market is experiencing an upward trend owing to increasing focus toward smart cities and buildings. Several government authorities are establishing strategic partnerships with private firms to increase their transition toward smart cities, creating a positive market outlook. For instance, in January 2021, Saudi Arabia announced to create a green smart city, NEOM, which is situated within 10,200 square miles in KSA will value at USD 500 billion. Industry participants are significantly investing in R&D to launch new equipment and achieve higher profitability from this potential market. For instance, in April 2021, Caterpillar launched the New CAT 816 Soil Compactor with improved airflow technology to reduce cleaning and maintenance. The radial air filter of this model lasts four times longer than the previous models.

Industry leaders are currently developing the next generation of construction equipment - ranging from alternative fuel trucks and semi-autonomous excavators - which will be considerably more productive, efficient, and environmentally friendly. New models will feature a variety of innovative technologies, such as advanced sensors, electric engines, and sophisticated data collection capabilities. For instance, Caterpillar offers excavators with technology that calculates real-time payload estimates without swinging to help prevent over- and under-loading trucks. Komatsu offers dozers that are equipped with capabilities that enable automatic tilt steering control and automatic spreading of fill material. The incorporation of such technologies into new models will spur both new and replacement equipment sales and drive up average construction equipment prices.

The demand for machines that are cost-effective, with regulatory pressures for lower emissions, is pressurizing construction equipment manufacturers to opt for electric and hybrid vehicles over the traditional hydraulic and mechanical ones. The construction industry is getting smarter. Digitalization, connectivity, and automation are driving the development forward, leaving a substantial impact on construction projects. Moreover, renting companies geared up in investing in new technologies to cope with the growing demand for advanced construction machinery and replace the older ones with new or upgraded machinery fleet.

Covid-19 Impacts:
Construction is among the significantly impacted industries due to the COVID-19 pandemic. Sales of construction equipment have fallen globally. Factors impacting construction equipment manufacturers include investments in infrastructure, residential, commercial, and industrial construction, mine and well construction, and institutional spending. Countries such as the US, UK, China, and India are among the significantly affected countries. However, there is significant demand for projects such as hospitals and other medical facilities, laboratories, and shipping and logistics infrastructure. In addition, some countries have begun moderately reopening activities across sectors, including the construction industry. For instance, China has begun industrial and commercial construction projects. Industrial output increased in April since January as the country began introducing new projects, and demand for construction equipment such as excavators increased significantly. The COVID-19 outbreak hampered the growth of the market, due to supply chain disruptions and temporary shutdowns of dealer stores. However, in 2021, there was a sudden increase in demand for construction equipment due to the resumption of construction activity for halted and new projects.

Major Companies Present In the Market
Caterpillar Private Limited, CNH Industrial, Doosan Infracore, Epiroc Construction Machinery Co. Ltd, Hitachi Construction Machinery Co. Ltd, J C Bamford Excavators Ltd, John Deere Ltd, Kobe Steel Ltd, Komatsu Ltd., Kubota Corporation, Liebherr Group, Metso Corporation, Sandvik Mining And Rock Technology, Sany Group, Terex Corporation, Volvo Construction Equipments, XCMG Ltd., Zoomlion Co. Ltd

Considered In the Report
• Geography: Global
• Base year: 2021
• Historical year: 2016
• Estimated year: 2022
• Forecasted year: 2027

Regions covered:
• North America (USA, Canada, Mexico)
• Europe (UK, Germany, Russia, France, Spain, Italy)
• Asia Pacific (Japan, India, China, Australia)
• South America (Brazil, Argentina, Columbia)
• Middle East & Africa (Saudi Arabia, UAE, Qatar, South Africa)

Aspects Covered In the Report
• Market Size By Value for the historic time period (2016-2021)
• Market Size By Value for the forecast time period (2021-2027)
• Market Share by Application (2016, 2021 & 2027F)
• Market Share by Equipments (2016, 2021 & 2027F)
• Market Share by Region (2016, 2021 & 2027F)
• Market Share by Country (2016, 2021 & 2027F)
• Market Share by Company (2021)

Segments covered in the Report

By Application
• Earth Moving Machinery
• Material Handling Machinery
• Concrete and road construction Machinery
• Other Machinery

By Earth Moving Machinery
• Excavators
• Loaders
• Dozers
• Motor Graders

By Material Handling Machinery
• Dumper /Dump Truck/ Tippers
• Cranes (Tower Crane, Mobile Crane)
• Telescopic Handlers
• Forklift

By Concrete and Road Construction Machinery
• Cement/Transit mixers
• Compactors & Road Rollers
• Pavers/Asphalt Finishers
• Others

The approach of the report:
We keep an eye on evolving markets and try to evaluate the potential of the products and services. If we find the market interesting, we start working on it and create the desired table of content, considering all aspects of the business. We start by creating separate questionnaires for C-level executives, national/regional sales personnel, company owners, dealers, distributors, and end-users. Once the questionnaires have been finalized, we start collecting the primary data (mostly through phone calls) and try to understand the market dynamics regionally or tier-wise. This process gives us in-depth details of the market, including all present companies, the top-performing products with reasons why they dominate; we get the details of new players and their innovative approaches; market trends; dynamics; and all the small details of the market. After the collection of primary inputs, we then cross-check the same with secondary sources that include associations, trade journals, annual reports, paid databases, newspapers, magazines, press releases, government sources, etc. From this, we get a rough estimate of the market and start checking existing product price variants, trade, production, raw material scenarios, policies and regulatory landscape, etc. Then, to finalize the market, we start collecting financials of each player present in the market, including limited, private limited, and LLPs. Moreover, we perform cross-industry and cross-region analysis of the product, and based on collected primary inputs and using statistical modeling, we start forecasting the market. We follow our forecasting algorithm, which is unique for each product but gives more weight age to primary inputs. At the same time, the content team starts preparing company profiles, market dynamics, market trends, five forces, PEST analysis, etc. Once the data is verified by the data expert, the team (primary team, content team, and data team) together crosscheck the segmentations, validate the market, and then the designing team starts plotting the graphs. Once the file is ready, the content team completes the report and makes sure that all the discussed points have been covered and provides their valuable inputs in the form of strategic recommendations for new as well as existing players. The QC team then checks the overall report that includes spell check, data verification, and makes the same dispatch ready and error-free.

Intended Audience
This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to the construction machinery and excavator industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.