According to a research report “Construction Equipment Market by Equipment Type (Excavator, Loader, Dozer, Dump Truck, Compactor, Crane), Propulsion, Power Output, Engine Capacity, Application, Electric Construction Equipment, Battery Chemistry & Region – Global Forecast to 2030″ published by MarketsandMarkets, the Construction Equipment market is projected to grow from USD 149.7 billion in 2023 to USD 194.7 billion by 2030, at a CAGR of 3.8%.
Construction Equipment Market Growth Dynamics
DRIVER: Growth in infrastructure development globally and rising demand for compact construction equipment
According to Oxford Economics, the construction industry is expected to grow from USD 9.7 trillion in 2022 to USD 13.9 trillion in 2037, driven by significant construction markets such as China, the US and India. The industry’s growth is mainly driven by increasing urbanization, population growth, technological advancements, the need to modernize existing infrastructure, and increased focus on developing sustainable green projects. Further, the construction equipment market has grown gradually with an increase in new equipment sales due to increased construction projects and planned new investments in the construction sector.
As per the declaration in June 2022, the European Union would invest nearly USD 5.4 billion in transport infrastructure development. The European Union has selected around 135 infrastructure projects to disburse development funds. In China, 102 mega projects were included in Beijing’s 2021-25 development plan. In December 2021, China’s finance ministry declared it had offered local governments an early allocation of ~USD 229 billion in quotas for 2022 for special-purpose bonds to support infrastructure investments. According to the UK Construction Leadership Council, planned investments include 700 projects and over USD 645.7 billion in the National Infrastructure Pipeline. Such planned investments and growing construction activities for infrastructure development would drive the demand for construction equipment during the forecast period.
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OPPORTUNITY : Government mandates telematics and e-call services
The construction equipment market is witnessing a lot of technological advancements for more optimized and reliable products. The off-highway industry is progressively embracing autonomous operating technologies. Construction activities are well-suited for autonomous machinery as the tasks are repetitive, physical, precise, and time-sensitive. Due to this, there is an increased need for automation in construction equipment. Manufacturers are creating wireless, autonomous construction machinery. using radio waves from other devices to obstruct communication technology, receive instructions, and report conditions. It guarantees enhanced production, decreased unplanned maintenance, and higher safety. Consequently, the growing popularity of autonomous construction equipment would present a business opportunity for the industry.
Thus, the growing popularity of automation and electrification is expected to offer futuristic growth opportunities in the construction equipment market.
“Crawler excavator is estimated to account for the largest market in 2023.”
Crawler excavators accounted for the maximum share in all construction equipment types as it is an all-around excavator used for demolishing surfaces and structures, digging sites, trenching, and lifting heavy objects. With rising urban infrastructure development (roads, metros, airports, etc.), real estate business, and other commercial buildings (malls, shopping centers), the crawler excavators would be the most preferred equipment due to their versatile work nature in confined spaces. Further, crawler excavators find applications for quarrying and aggregates in the agriculture, landscaping, and forestry industries. Additionally, key OEMs offer advanced-designed crawler excavators like CASE excavators, which deliver up to 17% more horsepower, faster cycle times, and lower fuel costs. Also, in 2023, Develon, formerly Doosan Construction Equipment, launched its new DX140LC-7K (14.6 tonne) crawler excavator. These excavators are designed for high performance and durability. These products are versatile; they can be equipped with various attachments such as buckets, hydraulic hammers, grapples, and drills. This makes them suitable for multiple applications – from digging and grading to demolition and material handling. Thus, owing to its ability to navigate challenging rough or muddy terrains with a high range of versatility and adaptability, crawler excavators are expected to dominate the construction equipment market over the forecast period.
“The Electric Dump Truck is expected to lead the electric & hybrid construction equipment segment.”
Electric dump truck is the largest market in the electric & hybrid construction equipment segment. Dump trucks, also known as dumpers, tipper dumpers, and tipper trucks, carry materials in surface and underground mining applications. Electric & hybrid dump trucks have emerged as a promising alternative to traditional diesel-powered vehicles owing to its range of advantages such as reduced or negligible fuel consumption, low noise, regenerative braking technology extending its driving range, and ability to handle heavy loads efficiently. The currently available battery technologies are undergoing tremendous developments and may not provide the required power output every time, so a majority of dump trucks are operating on hybrid-electric propulsion. The hybrid dump truck is powered by an additional electric motor, which delivers equivalent performance to counterparts with less fuel consumption and prevents electricity shortage in the case of pure electric dump trucks. Many companies are designing prototypes or pilot equipment showcased at trade shows or used at job sites to get real working experience. With the upcoming stringent emission laws in off-highway vehicles, such as China IV engine emission laws, the industry would anticipate a rapid shift towards electrification, driving the market demand for electric & hybrid dump trucks in future years.
Asia is projected to be the largest regional market.
Asia holds the largest share of the Construction Equipment market, which China dominates, followed by Japan and India. The growth of the Chinese market is mainly supported by stimulus spending provided by the government in 2020, which resulted in tremendous growth in the next two years. However, there was a sharp decline noticed in 2022 with a significant margin as the market started to fall to get normal to reach before 2020 sales. Due to this, the market is expected to remain downward in 2023. It will slowly recover in 2024, mainly due to the anticipated growing demand for compact equipment and the gradual increase in residential housing projects. Alternatively, demand for construction equipment in Japan is expected to grow because the government is heavily investing in reconstructing properties destroyed by natural disasters such as earthquakes and tsunamis.
Key Market Players:
The construction equipment market is dominated by players such as Caterpillar (US), Komatsu Ltd. (Japan), Hitachi Construction Machinery Co., Ltd. (Japan), Xuzhou Construction Machinery Group (China), and Deere & Company (US).
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