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 & Industrial) and Regional Forecast, 2021-2028

The global construction equipment market size was USD 133.37 billion in 2020 and is projected to grow from USD 141.99 billion in 2021 to USD 222.14 billion in 2028 at a CAGR of 6.6% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with construction equipment witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market will exhibit a lower growth of 2.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The global market growth is observed with the rise in public-private partnerships (PPP), increasing industrial, residential, and commercial construction activities, and rising government investments in infrastructure development. The major players operating in the market are investing in research & development activities for up-gradation in equipment in order to provide efficient equipment for industries and end-users including mining, agriculture, forestry, material handling (e.g., ports, warehouses), waste management, and municipal equipment (e.g., tool carriers, street sweeping).

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

COVID-19 to Impede the Partial or Complete Closure of Construction Activities

The building & construction industry is one of the worst affected sectors owing to the COVID-19 global pandemic. COVID-19 pandemic has paralyzed economic activities across the world. The committee for European construction equipment (CECE) stated that the COVID-19 pandemic extensively impacted near about 60% of the European construction equipment industry. The impact is majorly on original equipment manufacturers (OEMs). The Association General Contractors of America (AGC) states that the U.S. construction projects of nearly USD 160 billion are affected by the COVID-19 pandemic.

The partial or complete closure of constructing sites has consequently affected the equipment rental industry. Additionally, prominent players have 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 to steadily adjust 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 (a Material Handling Equipment) are in demand by the retail, food and packaging industries, as they fall under daily essential requirements supplying industries. The demand for these equipments will be dependent 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

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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 are likely to 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 that, with infrastructure plans receiving improved budgetary allocations in developing countries, the construction equipment 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, comfortable, and more affordable for governments to work with rental companies than owning their fleet of construction machinery.

DRIVING FACTORS

Adoption of Advanced Construction Equipment to Drive Growth

Consumers across the globe are demanding more fuel-efficient, technologically upgraded equipment for augmenting constructing activities. Adoption of upgraded equipment reduces labor costs, tracking of work done in every stage of the process, and also brings down 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 ICT (Information and Communication Technology) and IoT (Internet of Things) technologies. Additionally, they are engaged in introducing advanced equipment that can not only cater to customers’ requirements but also 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 model.

Increasing Construction & Infrastructure Investments Worldwide to Boost Demand of 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, is creating a huge 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 in the process.

RESTRAINING FACTORS

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

This heavy equipment is the major source of ozone emissions, thus resulting in deterioration of air quality. The emissions generated from this equipment such as nitrogen oxides (NOx), volatile organic compounds (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 transportation, utility companies, government agencies, and private companies are collaboratively initiating to collect 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 emission from construction machinery, along with improving energy efficiency, thus curbing the global warming effects.

SEGMENTATION

By Equipment Type Analysis

Material Handling Equipment & Cranes Segment to Show Lucrative Growth Rate in the Forecast Period

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

The material handling equipment segment is projected to have exponential and significant growth owing to the rising need for cranes and other machinery across several domains for handling heavy construction materials and products. AGV, forklift trucks, and telescopic handlers are the basic material handling cranes used in construction and warehouse applications. Furthermore, road building 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 have considerable growth owing to limited demand for mining applications.

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

By Application Analysis

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Industrial Application Segment to Witness Exponential CAGR

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

The industrial application 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 is likely to depict a considerable market worldwide.

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

REGIONAL INSIGHTS

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Asia Pacific is anticipated to emerge dominant in the market holding the largest 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, 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 as a result of numerous emerging market players that are manufacturing technology-driven construction machines. The Chinese government has been investing profoundly in rural construction activities for rapid urbanization, with emerging public-private partnerships, hence expected to drive the demand for construction machinery. In 2017, the Chinese government aimed to deliver the One Belt One Road project and the 21st century Maritime Silk Road that would cost around USD 4 trillion in order to improve the land and waterway connectivity.

Europe generated substantial revenue in 2019 and is expected to witness growth owing to increasing demand for new housing units, improving employment level, etc. 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 this market in North America. Additionally, the explicit efforts of these companies regarding technological developments, strategic partnerships, acquisitions, and focus on aftermarket services are also projected to influence the market potential in North America.

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Furthermore, in the Middle East & Africa, the Gulf Council Corporation holds the highest share in 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 the construction projects across the region for the time being.

KEY INDUSTRY PLAYERS

Key Market Leaders are Opting for Next-Generation Construction Equipment 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, as well as 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.

Furthermore, the companies are also indulged in transforming the traditional equipment into the next-gen machines that are acquainted with advanced technologies such as connected IoT, automation, etc. Additionally, these companies are expanding their services beyond their conventional setup in order to deliver value to customers throughout the lifecycle of their products by providing digital solutions.

• November, 2018 – Caterpillar Inc. launched the Next Generation D6 dozer, which has 35 percent better fuel efficiency and increased agility compared to prior models. Also, the company is continuously developing exciting new offerings, which promise to further drive customer loyalty and profitable growth.

LIST OF KEY COMPANIES PROFILED:

• AB Volvo (Gothenburg, Sweden)


• Caterpillar Inc. (Illinois, U.S.)


• Komatsu Ltd. (Tokyo, Japan)


• Doosan Infracore Co. Ltd. (Seoul, South Korea)


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


• J.C. Bamford Excavators Ltd. (Rocester, U.K.)


• Liebherr Group (Bulle, Switzerland)


• CNH Industrial N.V. (London, U.K.)


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


• SANY Group (Beijing, China)

KEY INDUSTRY DEVELOPMENTS:

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


• October 2019: Volvo launched its first electric compact wheel loader for German tree farming, offering emission-free and easy-to-maintain wheel loaders for a wide range of applications such as pallet handling and material loading, grading, and sweeping.


• August 2019: Doosan introduced a wide range of new products at Bauma 2019 exhibition including Stage V DX27z, DX62R-3, DX35z, DX63-3, and DX85R-3 mini excavators, DX250WMH-5 25-ton material handler, Stage V DX300LC-7 30-ton excavator, DX800LC-5B 80-ton excavator, and 30 and 40-ton Stage V compliant articulated dump trucks (ADTs) and DL280-5, DL420CVT-5 and DL580-5 wheel loaders.

REPORT COVERAGE

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 A growing trend is observed in the penetration of this market across several industries.

The global market report provides various key insights such as adoption trend analysis, recent industry developments including mergers & acquisitions, ecosystem analysis, macro, and microeconomic factors, consolidated SWOT analysis, key construction equipment market trends, competitive landscape and company profiles.

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