About the Report
With the construction industry growing steadily, demand for skid steer loaders is also increasing, and construction is the largest end user of these machines. Vertical lift skid steer loaders are highly sought-after across sectors, with the mid-range type witnessing high demand as far as operating capacity is concerned. Fact.MR’s report has a detailed region-wise analysis, where the region of APEJ leads the way for skid steer loader demand and usage.
The report comprises extensive primary research with detailed analysis of qualitative as well as quantitative aspects by various industry experts and key opinion leaders, to gain deeper insights into industry performance. It also provides in-depth analysis of parent market trends, macro-economic indicators, and governing factors, along with market attractiveness as per segment. The study also details how the COVID-19 pandemic has affected this industry, and what the outlook for the years ahead looks like.
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Future Outlook to Match Pace with Historical Trends
Demand for skid steer loaders has been rising at a CAGR between 2.5% to 3% over the last 5 years. This market continues to witness significant opportunities across the globe, on the backdrop of increasing demand for energy-efficient construction equipment.
According to studies, by 2050, 64% of the developing world and 86% of the developed world will be urbanized. As such, increasing investments made by governments in developed and developing countries for infrastructure development projects are anticipated to drive the construction industry, thereby heightening the need for skid steer loaders. Fact.MR forecasts a compound annual growth rate of over 3% from 2021 to 2031 for this market.
What is the Impact of COVID-19 on the Market?
Skid steer loaders are used in various industries, from mining, agriculture, forestry, ground maintenance, etc. However, their use in construction activities greatly outweighs all these sectors. Due to the onset of COVID-19, most countries imposed nationwide lockdowns to curb the deadly virus, which brought the construction industry to a standstill, besides causing disruptions in the supply chain and shortage of human resources.
The manufacturing of skid steer loaders as well was significantly affected. The USA is a key producers of skid steer loaders, and according to UNIDO, its machinery industry saw a decline of 4.9% in 2020, directly affecting the skid loader market.
However, as the world gets used to the new normal, and industries gradually get back on track, demand for skid steer loaders will pick pace from 2021 and onwards. Growth will be gradual, and most sectors find different ways to optimize their resources and move ahead in these tough times.
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What are the Challenges Faced by Skid Steer Loader Manufacturers?
Skid steer loaders are comparatively costlier, and this is why builders find it difficult to purchase or even rent them on a large scale. Even in the agricultural domain, high cost prevents poor farmers from purchasing these machines. There are a lot of improvements and modifications in skid steer loaders that are noteworthy, but high prices are preventing the adoption of this equipment in various sectors, affecting overall growth of the industry.
Moreover, owing to their complex mechanism, sales are not as high as expected, because their working principles vary greatly as compared to common tractors. Stringent emission norms regarding the use of construction equipment are also affecting demand for skid steer loaders. Government agencies such as EPA (Environmental Protection Agency) inflict heavy fines on manufacturers who do not meet standard norms.
However, these norms vary from one region to another, and one territory to another. For instance, in North America and Europe, new machinery has to follow even more rigorous emission regulations as compared to other parts of the world, which is hampering the growth of the skid steer loader market in these regions to some extent.
In most countries in the Asian region, though this is a fast-growing industry, manual labour is still an ideal choice for limited construction-related activities, because of the low cost and cheap availability labour, which again restricts the market from attaining its full potential.
Why is China a Huge Market for Skid Steer Loaders?
Asia Pacific Excluding Japan (APEJ) is expected to have dominate the global skid steer loader market during the forecast period, expanding more than the global average at a CAGR of close to 4%. China's in the middle of a massive boom in manufacturing. The nation has the largest construction market in the world, accounting for 20% of all construction investments, worldwide. China is expected to spend nearly USD 13 trillion on buildings by 2031.
This huge increase in the market value of the construction industry will drive great demand for skid steer loaders in the country. This market is expected to reach a valuation of around US$ 600 Mn in 2021. Rapidly rising urban population and increasing use of advanced technology will complement market growth through 2031.
How is Demand Skid Steer Loaders in India Catching Up?
Though the skid steer loader market in India is relatively at an embryonic stage, producers are piling up on the adaptability of this equipment and foresee its growing as an efficient app-driven machine. Confident about the equipment's numerous features and amazing performance capabilities in various sectors, interest for skid steer loaders is rapidly rising.
Scope of application extends to agriculture, recycling, urban infrastructure development, and renewal projects, notably the municipal sector, where a sizeable number of skid steer loaders are being applied in constricted locations.
As per census, due to the population growth rate being around 1.13%, India is expected to become the first country to be home to more than 1.5 billion people by 2030, and its population is set to reach 1.7 billion by 2050. This rapid increase in population is creating major demand for construction, which is expected to drive the skid steer loader market in the country, with sales estimated to expand at an impressive CAGR of more than 4% through 2031.
What makes the U.K. and Germany the Biggest Players in Europe?
In the U.K. and Germany, farms larger than 1,000 ha, on average, cover 20% of the utilized area. The opposite is true for other parts of Europe, where according to this land division, many large farms are on average less than 150 ha. This is the main reason why skid steer loaders are employed more in these two countries in Europe. Europe's skid steer loader market is mainly driven by construction, landscaping, and ground maintenance.
How are Brazil, Argentina, and Mexico Projected to Fare?
Growing focus on using alternate fuel-based machines will propel growth of the skid steer loader market in Latin America. Leading manufacturers are developing skid steer loaders with alternative fuels such as bio-diesel and electric or battery-operated, to attract new consumers and boost sales in the Latin American market. Introduction of products with alternative fuel sources will help vendors gain a larger market share and boost their revenues.
Annual food and agricultural exports, in 2016, across Brazil, Argentina, and Mexico, accounted for over US$ 100 billion. This has created demand for latest technology-equipped machinery for farming activities that can help produce maximum output.
Favourable government policies and growing demand for battery-run machinery will drive skid steer loader sales in these countries. Rising demand for 40-200 HP skid steers in the region will create lucrative opportunities for leading manufacturers.
Growing awareness among land owners about potential agricultural mechanization will encourage large-scale farmers to adopt technology-driven farming methods, thereby pushing demand for skid steer loaders besides other efficient machinery.
Why is Japan Gaining Momentum in the Skid Steer Loader Space?
In real terms, the Japanese construction industry has registered positive growth over the past years. Construction activity slowed during 2014–2015, as the economy suffered a technical recession due to the second yearly tax hike, which affected business confidence. However, the economy gradually recovered in 2016, driven by strong global demand and improvements in the country's export trade. This accelerated the pace of public and private sector investments in construction projects.
Over the forecast period (2021–2031), the industry is expected to expand slowly due to factors such as high public deflation. This will create demand for construction machinery, which will cascade to the skid steer loader market, expected to reach a valuation of US$175 Mn in 2021. Government efforts to revitalize the economy by focusing on infrastructure development are expected to provide momentum to the growth of the construction industry in the country.
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Why is the Construction Sector the Largest End User of Skid Steer Loaders?
Majority of people move to cities and towns because they view rural areas as places with hardship and backward/primitive lifestyles. With rapid growth in urbanization, there is continuous development of infrastructure on a large scale. Activities across sites call for equipment and machines that are both, strongly built and equipped with the latest technology.
This has buoyed the growth of the global skid steer loader market. Among the applications, the largest is construction, which is predicted to represent close US$ 1.4 Bn, or 49% of the market share in 2021.
Demand is driven by increasing projects such as construction of roads, rails, skyscrapers, highways, ports, etc., mostly on the back of projects related to smart cities.
Developments in infrastructure projects include adopting new technologies in construction activities. By 2031, the world is estimated to have 43 megacities with more than 10 million inhabitants, most of them in developing regions. Therefore, the construction sector is expected to be the largest sector using skid steer loaders over the next ten years, and is projected to exceed US$ 1.7 billion in revenue by 2031-end.
Why are Vertical Skid Steer Loaders Most Sought-after?
Among the lift types, vertical skid steer loaders hold three-fourth of the market share, due to their higher operating capacity because they keep the load closer to the centre of gravity, which offers greater stability. Landscaping, material handling, pallet fork work, and load and carry applications are a strong candidates for vertical lift machines, which makes these ideal to be used in the agriculture and mining sector.
This segment is expected to hold a market valuation of US$ 2.1 Bn in 2021, growing at the rate of more than 3.5% over the forecast years. Overall, the list of attachments that work well with medium-sized skid steers is extensive.
Compared to the vertical type, radial skid steer loaders have 15% less lifting capacity, owing to fewer pivot points. Vertical lifts have a better operating capacity, due to improved stability of the arm that follows a straight line, as opposed to the curved path of radial machines. As such, the radial type is less preferred, and is estimated to reach a valuation of over US$ 700 Mn in 2021.
What Makes 65-80 HP Skid Steer Loaders Popular?
If we look at the market according to HP, the largest with close to 60% market share is 65-80 hp skid steer loaders. These are ideal for agriculture and forestry applications, with their dynamic balance of rated operating power, net engine power, breakout forces, and steady hydraulic flow, making them an ideal companion to most attachments. Particularly considering 70 hp output, these frames can sufficiently power attachments at their optimal performance range.
Which Companies are Leading the Skid Steer Loader Market Space?
Key market players include Bobcat Company, CNH Agriculture N.V., ASV Sales & Services, Komatsu Ltd., and Wacker Neuson SE, among many others. For the Bobcat range in EMEA, total sales unit growth reached 11.0% in 2019 as compared to 2018, with a very impressive growth of around 12.7.
It is the number one company that has established its dominance in the market by selling more skid steer loaders than all its contemporaries combined. In a moderately consolidated market, all the players are trying to boost their market position. Initiatives and strategies adopted include forming strategic partnerships, striking investments, and engaging in mergers and acquisitions.
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Segmentation of Skid Steer Loader Market
- Up to 2000 lbs
- 2000 to 3000 lbs
- Above 3000 lbs
- Up to 65 hp
- 66 to 80 hp
- Above 80 hp
- Agriculture and Forestry
- Ground Maintenance
- North America
- Latin America
- East Asia
- South Asia
- FAQs -
With North America leading the market currently, several Asian countries are emerging and demand hubs for skid steer loaders.
The global market is expected to experience a growth rate of more than 3% from 2021 to 2031.
Rapid growth of population, resulting in high urbanization rates, is the major reason why APEJ is projected to surge ahead in the global skid steer loader market.
The need for skid steer loaders will continue from various industries, including construction, waste management, and urban infrastructure, considering their compactness, multi-utility, and manoeuvrability.
With construction and other industrial activities affected, and trade and movement restrictions in place, demand for slid steer loaders fell dramatically in 2021.
Skid steer loaders don’t come cheap, and many Asian countries still prefer cheap human labour for a lot of tasks.
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Is the market research conducted by Fact.MR?
Yes, the report has been compiled by expert analysts of Fact.MR, through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to a research analyst.
What research methodology is followed by Fact.MR?
Fact.MR follows a methodology that encompasses the demand-side assessment of the market, and triangulates the same through a supply-side analysis. This methodology is based on the use of standard market structure, methods, and definitions.
What are the sources of secondary research?
Fact.MR conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers. More information about desk research is available upon request.
Who are the respondents for primary research?
Fact.MR speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, and industry experts. For a full list of primary respondents, please reach out to us.
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