Construction Equipment Market
Construction Equipment Market Analysis by Product Type (Earth Moving Machinery, Material Handling Machinery, Concrete and Road Construction Machinery), By Region- 2022 to 2032
Global Construction Equipment Industry Outlook (2022-2032)
The global construction equipment market was valued at US$ 113 Bn in 2021, and is expected to increase at a steady CAGR of 4% during the forecast period. As per this growth rate, this industry can be projected to reach a market size of worth US$ 174 Bn by 2032.
Market Value for 2021
US$ 113 Bn
Expected Market Size in 2022
US$ 117.52 Bn
Projected Market Valued in 2032
US$ 174 Bn
Growth Rate (2022-2032)
Market Share of APAC during 2022
Revenue Share of earthmoving machinery segment
Key Companies Profiled
During the end of 2021, this market observed a rise in their growth and is thus can be expected to reach a market valuation of US$ 117.52 Bn by 2022. The favorable government initiatives, such as stimulus packages and lower housing rates, which influenced consumers to purchase new houses, are expected to drive market growth during the forecast period.
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Demand Analysis of Construction Equipment 2015-2021 vs. Market Outlook 2022-2032
According to market research and competitive intelligence provider Fact.MR, the demand for construction equipment expanded at a 2.8% CAGR between 2015 and 2021. This sluggish outlook is largely attributed to an overall slowdown in the construction industry, partly due to the COVID-19 pandemic, and partly due to a shift in construction activity from the West to the East.
In 2020, construction activity was negatively impacted by the COVID-19 outbreak. As a result of the rapid spread of COVID-19 infections, construction activity worldwide was suspended indefinitely. Supply chain disruptions and temporary closings of dealer stores caused new purchases to be halted for OEMs. The resumption of construction activity for halted and new projects, however, caused a spike in the demand for construction equipment in 2021.
Housing rates were further reduced, which led to an increase in demand for residences, thereby driving up equipment demand. In light of the current market dynamics, which include market uncertainty from the rising number of COVID-19 infections caused by the new variant Omicron, high steel and aluminum prices, and semiconductor shortages, equipment sales are expected to stymie growth over the next few quarters of 2022.
Globally, rising construction spending is expected to be one of the long-term factors driving sales in the market over the forecast period. Over the past few years, construction spending in the United States has grown significantly. As a result of the booming infrastructure projects worldwide and the use of heavy-duty excavators for building dams and highways, the earthmoving machinery segment dominated the market. The excavators sub-segment is projected to grow at a moderate CAGR during the forecast period. It is expected that this market will grow by 1.4x times during the forecast period.
What are the specific drivers of the Construction Equipment Market?
Developments in the infrastructure sector will bolster the growth
Demand for construction equipment is expected to be driven by the infrastructure sector, in conjunction with a variety of advanced construction equipment in rental fleets. The growing populations of Asia Pacific countries, including China, India, and South Asia, are driving the need for improved infrastructure including homes, schools, hospitals, stadiums, and government buildings.
In addition, the residential infrastructure construction sector is experiencing an increase in demand for construction equipment as a result of decreasing housing prices and rapid urbanization in various developing countries like China and India. Furthermore, the increase in government policies aimed at encouraging Public-Private Partnerships (PPP) and infrastructure over the forecast period is expected to boost the construction equipment market's growth.
Increased construction spending to accelerate the Market Growth
A major factor driving growth in the market over the forecast period is the increase in construction spending worldwide. Spending on construction has increased in the United States over the past few years. A number of upcoming multifamily housing construction projects in Europe are also expected to drive market growth, including Milanosesto Mixed-Use Complex (Italy), ZAC Campus Grand Parc Mixed-Use Development (France), Viadux Mixed-Use Community (U.K.), Camden Goods Yard Mixed-Use Community (U.K.), and Sackville Road Residential Community (U.K.).
Several initiatives to modernize the aging public infrastructure are also predicted to propel the growth of the market. Examples include an underwater tunnel connecting major European countries and railway tunnels. In India, the market for residential real estate is projected to grow by 12% to INR 120,104.2 Bn by 2032, from INR 7,000 Bn in 2015. The real estate market in India is driving an increase in the demand for construction equipment.
Strict regulations and environmental concerns are hindering the growth
Real estate projects across developing countries have been delayed by strict regulations and environmental concerns. In turn, this results in an increase in the project budget and slowed project processes. For example, heavy equipment is rented and left unused for long periods of time. These factors have a negative impact on construction equipment revenues.
However, the secondary market for used construction equipment is still developing. Consequently, the secondary construction equipment market experiences a reduction in overall revenue as a result of the inability to resell equipment.
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How will the market emerge in the North American region during the forecast period?
According to Fact.MR, on account of a rise in residential construction activity, North America is predicted to register a CAGR of over 3.2% over the forecast period. As reported by the U.S. Census Bureau, construction spending went up by 5.7% in January 2021, which led to a demand for equipment. In the next few quarters of 2022, the rental companies are also expected to have an increased demand for upgraded equipment because of the increasing penetration of earthmoving equipment rentals, particularly mini-excavators and compact truck loaders.
What will be the market scope in the APAC region?
Over 40% of revenue is projected to come from Asia Pacific in 2022, and the CAGR is forecasted at over 4% from 2022 to 2032. In emerging economies such as India, China, and Southeast Asia, the market growth is mainly the result of government policies that boost infrastructure projects.
Furthermore, the recent Regional Comprehensive Economic Partnership (RCEP) of China with Asia Pacific countries, such as Japan, South Korea, Australia, and other smaller Southeast Asian countries, is expected to increase the development of transport infrastructure in the region, thus driving demand. The deal was strategically designed for China to strengthen its regional economic ties and divert attention from the aftereffects of the U.S.-China trade war.
What can be expected from the earthmoving machinery segment during the forecast period?
As of 2022, the earthmoving machinery segment is poised to account for over 59% of total market revenue. As infrastructure projects boom worldwide, manufacturers and contractors are adopting conventional heavy-duty excavators to build dams and roads, leading to moderate growth of the excavators sub-segment during the forecast period.
What will drive the material handling machinery segment?
The material handling equipment is expected to grow at a CAGR of over 4% during the forecast period. Specifically, the increase is attributed to an increase in crawler crane use in sectors other than residential construction, notably industrial, manufacturing, and commercial buildings.
Material handling machinery is expected to be in demand worldwide as the need to maintain existing civil infrastructure, notably high-rise buildings, increases.
What will be the outlook of the concrete and road construction machinery segment?
The concrete and road construction machinery is expected to reach US$ 40 Bn by 2032. Increasing investment in road construction projects is expected to increase the demand for concrete and road construction machinery.
For instance, in 2020, the U.S. government added US$ 29 Bn to the allocated funds for highways investments, which increased to US$ 71 Bn in 2021.
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With a number of key players in the market, the market is highly competitive. OEMs are currently facing many short-term challenges, including shortages of skilled employees, high raw material prices, and shortages of semiconductor components. OEMs expect lower new construction equipment sales over the next few quarters of 2022 as a result of supply and logistic delays.
As an integral part of their product offerings, almost all key vendors in the market will look for ways to provide cost-effective and eco-friendly equipment going forward. It is expected that OEMs will adopt organic and inorganic growth strategies through joint ventures, partnerships, and mergers and acquisitions, which will help them increase their customer base and strengthen their market position.
- Komatsu Ltd. and Honda Motor Co., Ltd. signed a joint development agreement in January 2021. Komatsu and Honda worked together to electrify Micro Excavators (PCO1) and set up a battery-sharing system to provide Battery Power Packs (MPP) for use in construction equipment and related equipment.
- The new electric mobile crane from Manitex Vall, the V 110 R, was unveiled in February 2021. The battery-powered and remote-controlled lift rises to a height of 10.4 meters, has a lifting capacity of 11,000 kg and operates at a height of 10.4 meters.
Key Segments Covered in the Construction Equipment Industry Survey
- Earth Moving Machinery
- Construction Material Handling Machinery
- Crawler Cranes
- Trailer Mounted Cranes
- Truck Mounted Cranes
- Concrete and Road Construction Machinery
- Concrete Mixer & Pavers
- Construction Pumps
- Earth Moving Machinery
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