Europe Construction Equipment Market by Product (Earth Moving Machinery, Construction Material Handling Machinery, Concrete and Rail Construction Machinery), by Country - European Market Insights 2022 to 2032

Europe Construction Equipment Market Outlook (2022-2032)

The European construction equipment market is slated to grow at over 6% in the forecast period ranging from 2022 to 2032. As of 2021, the industry was valued at US$ 161 Billion, and is poised to register a Y-o-Y expansion rate of 5.6% in 2022 to reach US$ 170 Billion By 2032, the market is slated to reach US$ 304.43 Billion.

The construction industry contributes over 9% to EU current GDP. The transportation infrastructure sector is witnessing a boom in Europe construction industry. A slew of stalled projects and pristine apartments mushrooming in the European cities were factors causing a spurt in demand for construction equipment.

Europe Construction Equipment Historical Analysis (2015-2021) vs Growth Forecast (2022-2032)

According to market research and competitive intelligence provider Fact.MR, the demand for construction equipment expanded at a 5.8% CAGR between 2015 and 2021. This slump in outlook is largely attributed to an overall slowdown in the construction industry, partly due to the COVID-19 pandemic.

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 stalled indefinitely. Supply chain disruptions and temporary downing of shutters of dealer stores caused new purchases to be halted for Original Equipment Manufacturers (OEMs). In 2021, however a resumption of construction activity for halted and new projects caused a massive spurt in demand for construction equipment in 2021.

Furthermore, housing rates were further slashed, which led to an escalation in demand for residences, thereby driving up equipment demand. In addition, as business revert to normalcy, European construction players are resuming operations in full swing, paving way for equipment manufacturers to invest in the region. From 2022 to 2032, the market is expected to flourish 1.8x.

Prominent Drivers Influencing the Construction Equipment Market across Europe

Increase in Infrastructure Investments post the COVID-19 Pandemic

Construction is among the significantly impacted industries due to the COVID-19 pandemic. Sales of construction equipment have fallen globally. Factors impacting construction equipment manufacturers include investments in infrastructure, residential, commercial, and industrial construction, mine and well construction, and institutional spending.

Countries such as the U.K and Germany are among the significantly affected countries. However, there is significant demand for projects such as hospitals and other medical facilities, laboratories, and shipping and logistics infrastructure. In addition, some countries have begun moderately reopening activities across sectors, including the construction industry.

Incorporation of Electric and Autonomous Construction Equipment to attract Major Investments

Electrification is shaping the construction equipment market and offering significant opportunities and design possibilities. Electrification has been increasing in most market segments such as cars, buses, etc., including construction equipment. This has been made possible as advanced technologies are increasingly mature and affordable as they are also increasing regulations on emissions that have changed the future of the construction equipment industry.

Several cities around the world have announced bans on the use of diesel within city limits, impacting the operation of construction equipment in these cities. Also, stricter emission regulations are being implemented for heavy machinery and equipment on the global, regional, and local levels in European countries.

The emission and noise-pollution standards implemented by these regulations can be easily overcome with the use of electric construction equipment. This offers opportunities for construction manufacturers for the introduction of electric variants of existing/new products in the market.

Key Challenges Impacting Construction Equipment Uptake across Europe

Lack of Harmonized Emission Regulations may Limit Uptake of Certain Equipment

The Global Technical Regulation (GTR) aims at providing a worldwide harmonized method to determine the levels of emissions of gaseous compounds, particulate matter, particle number, CO2 emissions, fuel consumption, electric energy consumption, and electric range from light-duty vehicles. Regulatory authorities have been under pressure from engine and equipment manufacturers to harmonize worldwide emission standards in order to streamline engine development and emission type approval/certification for different markets.

Likewise, the California Air Resources Board (CARB) has harmonized the California GHG standards with the EPA Federal standards so that a manufacturer may elect to demonstrate compliance with the requirements in California by demonstrating compliance with the 2017 through 2025 My National greenhouse gas program, i.e., complying with the federal regulations will be deemed to be in compliance with the California regulations.

The European Commission has proposed the world’s toughest emission standards for non-road mobile machinery (NRMM), such as inland waterway vessels, construction equipment, railroad engines and off-road recreational vehicles. The Stage V standards adopted by the EU Parliament in July 2016 and published in the Official Journal of the EU as Regulation (EU) 2016/1628 in September 2016 have increased restrictions on non-road engines and equipment and implemented stricter limits on emissions of particulate matter (PM). These changes, along with the newly proposed particle number (PN) limits, are expected to lead manufacturers to equip non-road engines of between 19 kW and 560 kW with diesel particulate filters. The Stage V emission standards were phased in as early as 2018 for the approval of new engine types and in 2019 for all sales.

The rules are expected to replace an existing, multi-layered legal framework in Europe with one overarching regulation. Therefore, it is difficult for construction equipment manufacturers to entirely meet the latest emission regulations for different countries around the world. It becomes a challenge for them in terms of engine technologies, design, and associated costs.

Country-wise Insights

How is Germany expected to contribute to Market Growth of Construction Equipment in Europe?

According to Fact.MR, Germany is expected to emerge as an important player in the European construction equipment market, accumulating a market share of 36% as of 2021. During the 2022-2032 period of assessment, the report expects Germany to document a value CAGR worth 6.3%. A resurgent construction industry is likely to be the determining factor spearheading growth.

In 2019, Germany’s construction industry generated an output of roughly €430 Billion; approximately 2 million people had a job in the construction industry proper and in building completion work. Furthermore, as of 2022, additional sales of € 151 Billion are anticipated, reflecting a 5.5% increase compared to 2021.

With the country gradually emerging from the recessionary downswing induced by the COVID-19 pandemic, a slew of infrastructure projects are in the pipeline. Out of all planned projected, the following five are identified as the most lucrative: Krampnitz Housing Development (US$ 1,831 Million), Ostendstraße 1-14 Commercial Buildings (US$ 1,293 Million), the B 247 Highway: Mühlhausen to Bad Langensalza (US$ 618 Million), the Messeeingang Sparda Bank Tower Mixed-Use Complex (US$ 200 Million) and the Elements Mixed-Use Development project (US$ 186 Million). Such projects will provide immense growth opportunities for key construction equipment players across the country.

Category-wise Insights

By Product, which Construction Equipment Category is expected to Dominate?

As of 2022, the earthmoving machinery segment is poised to account for over 59% of total market revenue. As infrastructure projects proliferate 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.

Increase in construction work has resulted in increased consumption of diesel. Compared to gasoline, diesel is more economical, but is unsafe for the environment. Policy makers across Europe have put in place regulations that requires diesel engines to produce almost negligible NOx and SOx emissions. This has forced Original Equipment Manufacturers (OEMs) to switch to hybrid and complete electric vehicles in the future. Electric construction equipment are not only zero emission machines but also produce very less heat, noise and vibrations.

Competitive Landscape: Top Companies in Construction Equipment Market

The European construction equipment market is a consolidated market with key players such as Liebherr, Volvo Equipment and Wirtgen Group dominating the market. For instance:

• In 2019, Volvo Construction Equipment announced in an official statement that it will start producing compact electric excavators and wheel loaders: EC 15 to EC 27 electric excavators and L20 to L28 electric wheel loaders
• In 2020, Dutch company BAM infra built world's first electric road roller that is capable of saving more than 70 liters of fuel per day and cutting 236 kilograms of carbon dioxide per day. The roller is currently deployed at Almere municipality and it is helping BAM infra to achieve its sustainability goals.

Key Segments Covered in the Europe Construction Equipment Market Report

• Europe Construction Equipment Market by Product

  • Earth Moving Construction Machinery
    • Excavator
    • Loader
    • Others
  • Construction Material Handling Machinery
    • Crawler Cranes
    • Trailer Mounted Cranes
    • Truck Mounted Cranes
  • Concrete and Road Construction Machinery
    • Concrete Mixer & Pavers
    • Construction Pumps
    • Others

• Europe Construction Equipment Market by Country

  • Germany
  • France
  • U.K
  • Italy
  • BENELUX
  • Nordics
  • Rest of Europe