Construction Equipment Market Size, Share & COVID-19 Impact Analysis, By Equipment Type (Earthmoving Equipment, Material Handling Equipment & Cranes, Concrete Equipment, Road Building Equipment, Civil Engineering Equipment, Crushing and Screening Equipment, and Other Equipment), By Application (Residential, Commercial, and Industrial), and Regional Forecast, 2023-2030

The global construction equipment market size was valued at USD 142.39 billion in 2022 and is projected to grow from USD 151.60 billion in 2023 to USD 237.66 billion by 2030, exhibiting a CAGR of 6.6% during the forecast period of 2023-2030.

The global market is growing due to an increase in public-private partnerships, rising construction activities across industrial, residential, and commercial sectors, and greater government infrastructure investments. Major players are investing in R&D to upgrade equipment efficiency for industries like mining, agriculture, forestry, material handling, waste management, and municipal services.

A significant market trend observed is the ongoing shift from traditional equipment to automated equipment as consumers retrofit and renovate old technology. In order to increase productivity across the construction industry, prominent and strong players are effectively trying to tighten up the supply chain and achieve higher efficiencies.

COVID-19 IMPACT

COVID-19 Impeded Partial or Complete Closure of Construction Activities

The COVID-19 pandemic paralyzed economic activities across the world and the building & construction industry was the worst affected sector. The Committee for European Construction Equipment (CECE) stated that the COVID-19 pandemic extensively impacted nearly 60% of the equipment industry in Europe. The impact is majorly on original equipment manufacturers (OEMs). The Association of General Contractors of America (AGC) also stated that the U.S. construction projects of nearly USD 160 billion are impacted by the COVID-19 pandemic.

The abrupt closure of construction sites consequently obstructed the equipment rental industry. Additionally, prominent players decided to temporarily shut down their factory activities across the globe in the first quarter of 2020.

• For instance, in April 2020, Hitachi Construction Machinery Co. Ltd. stated that the company is on the verge of steadily adjusting the production, assembly, and painting of medium and large-sized excavators, hydraulic components, and medium-wheeled loaders at its four Japanese plants in April and May.

However, forklift trucks (Material Handling Equipment) were in demand by the retail, food, and packaging industries, as they fall under daily essential requirements supplying industries. The demand for products depended on the pace of ongoing projects, the trend in fund flows from governmental bodies, availability of transportation, and most importantly, the subordinates at project sites.

LATEST TRENDS

Emergence of Construction Equipment Rental Services to be a Major Trend

Rental services are nowadays gaining more traction across the global market. As per the Construction Equipment Rental Association (CERA), developing and the most populated economies such as China and India are expected to witness surging demand for rental service business over the forecast period. The regional and local emerging players will likely establish their footprint in the rental service business, creating ample revenues from their regional customer base. Large construction firms are engaged primarily in the following sectors to earn higher profits: general infrastructure, oil and gas, utility and electrical, and commercial and residential construction.

Besides, with infrastructure plans receiving improved budgetary allocations in developing countries, the rental market’s growth would be progressively steady as governmental projects show a higher preference for the rental use of equipment. Moreover, it is safer, more comfortable, and more affordable for governments to work with rental companies than owing their fleet of construction machinery.

DRIVING FACTORS

Adoption of Advanced Equipment to Drive Market Growth

Consumers across the globe are demanding technologically upgraded, more fuel-efficient equipment for augmenting construction activities. Upgraded equipment reduces labor costs, tracking of work done in every stage of the process, and decreases operational costs. Players are working on expanding their business domain by providing products, services or solutions along with new values which take full advantage of Information and Communication Technology (ICT) and Internet of Things (IoT) technologies. Additionally, they are engaged in introducing advanced equipment that can cater to customers’ requirements and overcome social and environmental problems. Thus, the end-users are more attracted to these machines. Recently, an Australian company Black Cat Civil found the Cat Next Gen excavators to be a perfect match for their technology-focused business models.

Increasing Construction & Infrastructure Investments Worldwide to Boost Demand for Equipment

The government and private sectors across the globe are making large investments in the construction of new residential & commercial buildings and public infrastructure, supporting the growth of the construction industry. According to the Institute of Civil Engineers, the global construction market is expected to reach around USD 8 trillion by the end of 2030, driven by infrastructure development across the U.S., China, and India. Increasing urbanization, particularly in Latin American and Asian countries, creates a massive demand for residential infrastructure, contributing to the construction equipment market growth. Governments in European countries are making investments in new smart city development projects. The European Union is expected to have over 300 smart cities by 2020, boosting the adoption of advanced construction machines.

RESTRAINING FACTORS

Use of Construction Equipment Results in Environmental Imbalance and Hampers Market Growth

 Heavy construction equipment is the major source of ozone emissions, thus resulting in the deterioration of air quality. The emissions generated from this equipment, such as nitrogen oxides (NOx), Volatile Organic Compound (VOC), and carbon monoxide (CO), adversely affect the environment causing environmental imbalance across rural and urban areas. Moreover, mining equipment operating at the mining sites is another source of significant ozone emissions.

However, to attain control over these emissions worldwide, local departments of utility companies, government agencies, transportation, and private companies are collaboratively initiating to gather data on the number of equipment and construction project locations. Similarly, building permits for commercial, residential, and demolition projects are collected for calculating and monitoring geo-code construction emission substrates by adopting various software technologies. Moreover, the developed countries are actively taking steps to strengthen the laws over exhausting emissions from construction machinery and improve energy efficiency, thus curbing the effects of global warming.

SEGMENTATION

By Equipment Type Analysis

Material Handling Equipment & Cranes Segment to Show Lucrative Growth Rate During Forecast Period due to Rising Need for Cranes

Based on equipment type, the market is segmented into earthmoving equipment, material handling equipment & cranes, concrete equipment, road building equipment, civil engineering equipment, crushing and screening equipment, and other equipment.

The material handling equipment & cranes segment is projected to have exponential growth owing to the rising need for cranes and other machinery across several domains for handling heavy construction materials and products. AGVs, forklift trucks, and telescopic handlers are the basic material handling cranes used in construction and warehouse applications.

Furthermore, road building equipment and earthmoving equipment segments are expected to show progressive demand as the investments for industrial and commercial construction projects are rising in developing countries such as China and India. Civil engineering and concrete equipment segments are anticipated to depict stable growth as the need for this equipment depends upon the number of ongoing construction and infrastructure projects. The crushing & screening equipment segment is expected to grow considerably due to limited demand for mining applications.

The other equipment segment consists of tippers, trailers, and tankers that will likely have stagnant demand in the overall market.

By Application Analysis

Industrial Application Segment to Witness Exponential CAGR due to Rising Industrialization

Based on application, the market is segmented into residential, commercial, and industrial.

The industrial segment is anticipated to portray progressive growth in the near future owing to rising industrialization and foreign direct investments (FDI) for several international manufacturing plants in developing countries.

Commercial infrastructure development across developed and developing countries will likely depict a considerable market worldwide.

Rapid population growth in Asian and African countries is expected to uplift the market with stable growth for residential sector applications.

REGIONAL INSIGHTS

Asia Pacific is anticipated to dominate the construction equipment market share during the forecast period. Growth witnessed in the region is likely to be driven by the emergence of online retail facilities, availability of machinery on a rental basis, rising government investments in infrastructure development, and enhancement in capital investments. Similarly, the Chinese government is investing in public infrastructure and renewable energy, and also in residential construction projects, which in return is resulting in the increased demand for construction machinery.

China to Witness the Highest CAGR with Rising Building and Construction Projects

China is estimated to hold the highest market share in Asia Pacific due to numerous emerging market players manufacturing technology-driven construction machines. The Chinese government has been investing profoundly in rural construction activities for rapid urbanization, with emerging public-private partnerships expected to drive the demand for this equipment. In 2017, the Chinese government aimed to deliver the One Belt One Road project and the 21st century Maritime Silk Road which would cost around USD 4 trillion to improve land and waterway connectivity.

Europe generated substantial revenue in 2019 and is expected to witness growth owing to increasing demand for new housing units and improving employment levels. Also, as Germany is considered the home to Europe’s best-performing machine and equipment sector, Europe is expected to have a significant opportunity to grow over the forecast period. Moreover, European countries such as Italy & Spain are expected to show slow growth during 2020, owing to the sudden spread and long-lasting effect of COVID-19 across these countries.

The strong presence of the prominent companies Caterpillar and Sany America is aiding the growth of the market in North America. Additionally, the explicit efforts of these companies regarding acquisitions, technological developments, and partnerships along with focus on aftermarket services influence the market potential in North America.

Furthermore, in the Middle East & Africa, the Gulf Council Corporation holds the highest share of the regional market, owing to the development of large-scale infrastructure projects across the GCC countries. However, these countries have been affected severely by the COVID-19 pandemic, leading to reduced operations in the construction sector, which is projected to slow down the progress of the Saudi Vision 2030 project.

Similarly, the construction sector in Latin America has had steady growth over the past few years, owing to moderate infrastructure investments. The COVID-19 pandemic, however, has led to suspended operations of the equipment manufacturers in Brazil and Colombia. More than 1,900 housing projects have been shut down in Colombia due to the coronavirus, thus minimizing the pace of construction projects across the region for the time being.

KEY INDUSTRY PLAYERS

Key Players are Opting for Next-Generation Products to Expand their Product Portfolio

The market leaders such as Caterpillar Inc., JCB, Komatsu, AB Volvo, and Liebherr dominate the global market, controlling up to 40% of the market share. Their dominance is due to the strong customer base of these companies worldwide and the increasing graph of investments for product development. Additionally, Caterpillar Inc. holds the highest share in the global market, owing to its decades of strong market presence and a large customer base. The companies also indulge in transforming traditional equipment into next-gen machines acquainted with advanced technologies such as automation and connected IoT. Additionally, these companies are increasing their services past their conventional setup to deliver value to customers throughout the lifecycle of their products by offering digital solutions.

List of Key Companies Profiled:

• AB Volvo (Sweden)


• Caterpillar Inc. (U.S.)


• Komatsu Ltd. (Japan)


• Doosan Infracore Co. Ltd. (South Korea)


• Hitachi Construction Machinery Co., Ltd. (Japan)


• J.C. Bamford Excavators Ltd. (U.K.)


• Liebherr Group (Switzerland)


• CNH Industrial N.V. (U.K.)


• Hyundai Construction Equipment Co., Ltd. (South Korea)


• SANY Group (China)

KEY INDUSTRY DEVELOPMENTS:

• March 2023: Clairemont Equipment Company collaborated with Komatsu to expand its geographical presence in Los Angeles.


• May 2021: Liebherr extended its product portfolio of T 274 haul trucks by introducing a new 305t/336 tons haul truck that bridges the gap between T 284 (363 t / 400 tons) and the upgraded T 264 (240 t / 265 tons).


• October 2021: Volvo CE and Lego Technic designers and engineers have built smart construction technology together and launched 42081 LEGO Technic Concept Wheel Loader ZEUX.


• July 2021: Komatsu Ltd. launched 20-ton PC200-10M0 hydraulic excavators for civil engineering under its CE series in Southeast Asia.


• January 2021: Sany Global launched its R&D center for construction machinery in China with the objective of electrification and digitalization of machinery products.

REPORT COVERAGE

A growing trend is observed in the penetration of this market across several industries. The report provides key insights such as adoption trend analysis, recent industry developments, including mergers & acquisitions, ecosystem analysis, macro & microeconomic factors, consolidated SWOT analysis, key industry trends, competitive landscape, and company profiles.

Report Scope & Segmentation