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The construction equipment market size is forecasted to increase by USD 3,818.92 million, at a CAGR of 5.24% between 2022 and 2027. The market growth analysis depends on several factors, including the expanding manufacturing and distribution facilities, the increasing investment in infrastructure, and the rising number of new launches.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The expanding manufacturing and distribution facilities are driving the market growth. Companies are focusing on expanding their production capabilities to cater to the growing demand for construction tools globally. An increase in production capacity helps companies cater to the demands of customers across the world. Therefore, various companies are investing in expansion projects. For instance, in 2021, Volvo Group expanded its parts distribution network in Western US. Similarly, in April 2022, Joseph Cyril Bamford Excavators Ltd (JCB) announced that it would open a new manufacturing plant in Gujarat, India.
Moreover, manufacturers in the construction industry focus on providing convenient services to their consumers and are expanding their manufacturing capabilities for easy maintenance and repair. This can help them differentiate themselves from their rivals and increase revenue growth in the long run. Thus, the expansion of manufacturing and distribution facilities by various companies is expected to fuel the growth of the market during the forecast period.
The emergence of smart cities is a key trend in the market. Smart cities require the integration of information and communication and the adoption of the latest technologies for effective management of operations. The emergence of smart cities leads to developments in functional areas such as transportation, traffic management, energy efficiency and sustainability, and governance. An increase in the number of smart city projects globally will fuel the need for the installation of road safety tools in advanced road network systems. This will create growth opportunities for vendors operating in the market.
Moreover, aligned with market trends and analysis, the Association of Southeast Asian Nations (ASEAN) has created a collaborative platform to strengthen the vision of smart city projects. Efficient waste management, smart streetlights, smart highways, parking sensors, and improved security are a few major objectives of smart cities. Thus, the increase in the number of smart cities across the globe will support the growth of the market during the forecast period.
Stringent regulations on the construction industry are challenging market growth. Countries are focusing on combating climate change and are making manufacturing and construction processes cleaner and greener. This has compelled environmental bodies across the world to come up with stringent emission regulations for factories, production facilities, waste management, machinery, and equipment. For instance, the EU has announced a Stage V exhaust emission regulation, which limits the emission of PM g/kWh to 0.015 to 0.4 oxides of nitrogen (Nox) g/kWh. It also requires vendors to install additional parts, such as DPF, in the equipment.
Thus, the need to comply with new and strict emission regulations introduced by various countries adversely affects the profit margins of various manufacturers. The design and manufacturing of machinery should comply with new norms that require manufacturers to equip machinery with new components. However, this results in increased costs, which will limit the growth of the market during the forecast period.
The owned equipment segment will account for a significant share of market growth during the forecast period. The segment comprises machines that are owned by construction companies, contractors, and other stakeholders. These machines are used for various construction activities, such as excavation, transportation, lifting, and material handling. The machines in this segment include excavators, loaders, bulldozers, and cranes. The growth of this segment can be attributed to factors such as infrastructure development in emerging economies, increasing urbanization, and growing demand for residential and commercial properties.
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The owned equipment segment was valued at USD 5,998.20 million in 2017 and continued to grow until 2021. The growing trend of renting tools has also boosted the owned segment's growth. Many companies and contractors prefer to own their machines instead of renting them to save costs. This trend has led to an increase in the demand for owned segment. These factors will drive the growth of the segment during the forecast period.
The commercial segment will account for a significant share of market growth during the forecast period. This segment consists of commercial buildings, such as shops, hotels, restaurants, office spaces, industrial buildings, schools, and hospitals. In the Middle East, the commercial segment is registering growth in countries such as the UAE, Qatar, and Saudi Arabia owing to the strong investments in the commercial sector. For instance, in June 2021, Enable Midstream Partners, LP, announced that it had received approval from FERC to construct and operate the Gulf Run Pipeline project. In addition, the emergence of multinational companies has led to a rise in the number of employees and office spaces globally. The rising number of technological and business parks is triggering the demand in commercial spaces, which is expected to increase during the forecast period.
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APAC is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Growing construction activities in emerging countries such as India, Afghanistan, and Bangladesh are driving the growth of the market in APAC. This market is expected to grow steadily during the forecast period owing to the demand for new infrastructure to provide residential and commercial spaces for the growing urban population. Developing nations such as India, Indonesia, and Thailand are investing significantly in infrastructure development. For instance, in 2019, the Government of India made plans to invest USD 350 billion toward road infrastructural development in the Northeast region of the country during 2020-2025. The plan is aimed at improving the country's economy. Such investments are expected to fuel the growth of the regional market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market report also has detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
The market analysis and report offers clients a deeper understanding of the market and its players through a combined qualitative and quantitative analysis of the vendors. The analysis classifies vendors into categories based on their business approach, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak to understand the dos and don’ts of business which in turn can help a client make the best decision.
The market research and growth report forecasts market growth and forecasting by revenue at global, regional, & country levels and provides an analysis of the latest market growth and trends opportunities from 2017 to 2027.
The market is experiencing robust growth driven by factors such as rapid urbanization and increased government spending on road infrastructure projects construction sector. Earthmoving and material handling equipment like dump trucks are in high demand, especially in large-scale projects such as Singapore's Changi Airport Terminal 5 (T5). Technological integration is reshaping the industry, with OEMs focusing on innovations like batteries and autonomous vehicle technology to address concerns like the high cost of products. The contractor's inclination towards electrification and automation is to comply with regulations like the Building Standard Act of Japan and to meet sustainability goals.
Further, the global market encompasses a wide array of machinery, including earthmoving equipment. In the U.S., the emphasis is on fulfilling the needs of national highway projects, influenced by contractor inclination and market concentration. Considerations such as substitutes, pricing, and product quality drive purchasing decisions, with a nod to features and brand name recognition. The emergence of electric equipment in the <100 HP range and mini-excavators is notable. Particularly in developing countries, demand for compact wheel loaders in the 101-200 HP range is rising, reflecting government focus on infrastructure development. Furthermore, material handling machinery and earthmoving machinery are witnessing significant adoption amidst rapid industrialization. The market is witnessing a shift towards electrification of the equipment, with propulsion types diversifying between ICE segments and electric power output options.
Construction Equipment Market Scope |
|
Report Coverage |
Details |
Page number |
162 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.24% |
Market growth 2023-2027 |
USD 3,818.92 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.72 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 33% |
Key countries |
US, China, India, Japan, and Germany |
Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AB Volvo, Action Construction Equipment Ltd., Caterpillar Inc., CNH Industrial NV, Deere and Co., Doosan Corp., Escorts Kubota Ltd., Guangxi LiuGong Machinery Co. Ltd., Hitachi Construction Machinery Co. Ltd., Hyundai Construction Equipment Co. Ltd., J C Bamford Excavators Ltd., Kobe Steel Ltd., Komatsu Ltd., Liebherr International Deutschland GmbH, Manitou BF SA, SANY Group, Sumitomo Heavy Industries Ltd., Terex Corp., Xuzhou Construction Machinery Group Co. Ltd., and Zoomlion Heavy Industry Science and Technology Co. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our Market forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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