Construction Equipment Market (2024 - 2030)

Construction Equipment Market Summary

Thus, increasing infrastructure development activities across the globe is anticipated to increase demand for earthmoving and material handling equipment, thereby driving the growth of the global construction equipment market. Increasing government spending on upgrading the present infrastructure is responsible for increasing construction activities in developing countries. A country such as India is highly focused on enhancing the road infrastructure to facilitate flawless transportation of resources. For instance, in June 2022, the Indian Minister of Road Transport and Highways announced the opening of 15 new national highway projects worth USD 1.7 billion in Patna and Hajipur in Bihar.

For instance, in Mach 2023, the government of Singapore announced that it would commence the construction of new terminal 5 (T5) at Changi Airport in 2025. The T5 addition to the existing airport is focused on lowering the air passenger traffic at Changi Airport. This increasing road construction activity is increasing demand for material handling and road construction equipment such as forklifts, pavers, dozers, etc., further supporting the growth of the global construction equipment market.

Technological integration with construction equipment is expected to favor market growth over the forecast period. OEMs have capitalized on this as an opportunity to launch new products and expand their customer base in the construction equipment market. For instance, in January 2023, John Deere announced the launch of farming and building equipment powered by batteries. The company states that when John Deere released new farming and building technologies, factors such as a growing population, dwindling amounts of arable land, and rising greenhouse gas emissions were all considered.

The high cost of product and contractor inclination towards adopting rental equipment are some significant factors expected to hamper the growth of the global construction equipment market. Contractors are inclined towards renting the construction equipment for the specified project's timeline against being in charge of vehicle ownership. Construction equipment ownership ties up a significant amount of capital, impacting other business operations.

Market Concentration & Characteristics

Industry growth stage is medium, and pace of the industry growth is accelerating. The construction equipment industry is characterized by a high degree of innovation. The advent of autonomous vehicle technology in material handling is expected to open new avenues for industry growth. Adopting autonomous construction equipment ensures operators' safety and helps maintain a safe work environment.

The construction equipment industry is also characterized by a high level of new product launch activity by the companies. This is due to several factors, including increase the availability of their products & services in diverse geographical areas.

Government laws to improve the structure, site, facilities, and use of the buildings is expected to augment industry growth. The Building Standard Act of Japan aims to protect people's lives, health, and property by establishing minimal standards for building locations, designs, and uses.

There are hardly any direct or external substitutes to construction equipment at present. However, there are considerable opportunities for internal substitution over the next few years, such as electrification of construction equipment. Moreover, construction equipment is continuously getting smarter and energy-efficient in line with the advances in technology and the aggressive research & development efforts being undertaken by the OEMs.

Buyers in the construction equipment industry consider factors such as pricing, product quality, features provided, and the brand name before buying the product. Buyers generally enter into long-term contracts with suppliers to provide construction equipment.

Product Insights

The material handling machinery segment led the market and accounted for 38.5% in 2023. The material handling machinery segment growth can be attributed to factors such as the rapid industrialization and rising demand for automation in material handling machinery. In developed countries, completely automated industrial facilities have been established as a result of growing automation adoption and ongoing technological advancements in the market. It is expected that the market for material handling equipment will grow due to the ongoing modernization of industrial infrastructures and facilities to increase their production capacity.

The earthmoving machinery is expected to register a considerable growth rate over the forecast period. The construction sector's growth, both in developed and emerging economies, has significantly contributed to the earthmoving machinery market. Increasing investments in residential, commercial, and industrial construction projects necessitate the use of heavy machinery. Earthmoving equipment facilitates tasks like excavation, grading, and material handling, enabling efficient and timely completion of construction projects.

Propulsion Type Insights

The ICE segment accounted for the largest market revenue share in 2023. ICE generates power using a combustion engine and transfers it to the wheels through a transmission system. These vehicles come equipped with sturdy internal combustion engines capable of delivering substantial torque and horsepower, enabling them to efficiently handle demanding tasks. The power provided by ICE machinery empowers them to tackle heavy loads, operate in rugged terrains, and accomplish tasks that demand substantial force and endurance.

The electric construction equipment is anticipated to register the highest CAGR over the forecast period. In contrast to diesel or gasoline-powered construction equipment, electric-based machinery offers significant advantages in terms of lower operating expenses. They necessitate minimal maintenance, and the cost of electricity is generally lower compared to diesel or gasoline. As a result, this factor is anticipated to be a driving force in the market in the coming years. Moreover, governments globally are implementing regulations and providing incentives to promote the widespread adoption of electric construction equipment. For instance, the European Union has made it mandatory for OEMs to install essential ADAS functions, such as cruise control and lane departure warning systems on heavy equipment by 2020.

Power Output Insights

<100 HP segment accounted for the largest market share in 2023. <100 HP construction equipment, include mini-excavators, compact wheel loaders, skid steer loaders, and compact track loaders, offer exceptional versatility and maneuverability. Rising use of compact construction equipment in emerging economies such as Asia Pacific, Latin America, and Africa is further anticipated to drive the demand for the market over the forecast period. Infrastructure development, urbanization, and small-scale construction projects have increased the demand for cost-effective, compact, and versatile machinery. Advancements in technology, including operator comfort, improved powertrain efficiency, and automation, are also contributing to the segment’s growth.

The 101-200 HP segment is anticipated to register the highest growth rate over the forecast period. These machines, such as excavators, bulldozers, loaders, and graders, are essential for heavy-duty tasks. Machines in the 101-200 HP range often feature designs that prioritize serviceability, allowing easy access to critical components for maintenance and repairs. Efficient maintenance processes and readily available spare parts contribute to minimizing downtime and maximizing productivity.

Regional Insights

The North America construction equipment market was valued at USD 40.61 billion in 2023. One of the key drivers of the rising demand for construction equipment is the rapid development of smart cities in North America. Government programs such as the Smart Cities Project beneath the U.S. Economic Development Program support the regional construction equipment growth. Technologically advanced construction tools, such as earthmoving, roadbuilding, and material-handling machinery, are increasingly used in the region to develop smart cities efficiently.

U.S. Construction Equipment Market Trends

The construction equipment market in the U.S. is expected to grow at a CAGR of 7.1% from 2024 to 2030. The growth of construction equipment is ascribed to Due to the increasing investments by manufacturers and suppliers in installing automated equipment in manufacturing facilities and warehouses, the U.S. construction equipment industry is expected to see significant growth. The rise of e-commerce businesses has significantly increased the size of the regional market. Major companies such as Amazon and eBay spend a lot of money building warehouses to store their inventory.

The construction equipment market in Canada is projected to grow due to significant investment in smart grids and smart meters, coupled with the rising awareness regarding greenhouse emissions. The government has launched a smart grid program that addresses the major infrastructure development achieving its goals for an energy framework based on clean energy growth.

Asia Pacific Construction Equipment Market Trends

The Asia Pacific construction equipment market accounted for a share of 43.8% of the global revenue in 2023. Manufacturers in the Asia Pacific construction equipment market is responding to the situation by offering a wide range of construction equipment models suitable for the diverse construction needs in the region. The strong emphasis on infrastructure development and the need for efficient and adaptable construction machinery are among the other significant drivers driving the growth of the Asia Pacific construction equipment market.

The construction equipment market in China is projected to grow at a CAGR of 10.9% from 2024 to 2030. Additionally, the recent Regional Comprehensive Economic Partnership (RCEP) free trade agreement of China with Asia Pacific countries, including Japan, South Korea, Australia, and other smaller Southeast Asian countries, is expected to develop advanced transport infrastructure activities in the region, thereby driving the demand for construction equipment.

India construction equipment market is accounted for a 12.5% revenue share of the Asia Pacific market in 2023. The equipment growth can be attributed to the factors such as the improved economic conditions, greater private sector investment, and the development of residential and commercial infrastructure in the country. The construction of roads, railroad lines, airports, and other infrastructure has received significant funding from the U.S. government, necessitating the use of loaders, excavators, and other heavy machinery.

The construction equipment market in Japan is experiencing an increase in the use of forklifts and telescopic handlers due to factors such as technological advancements in telescopic handlers and electrification of construction equipment. Furthermore, government initiatives to boost infrastructure spending, especially related to disaster-resilient structures, have also contributed to the equipment growth in Japan.

Australia construction equipment market is projected to grow at a CAGR of 6.1% from 2024 to 2030. The growing demand for construction equipment in Australia is closely linked to the nation's commitment to investing in infrastructure development and natural resource exploration. This strategic alignment positions loaders as essential equipment for undertaking various tasks, thereby driving the growth of the market.

Europe Construction Equipment Market Trends

The Europe construction equipment market is expected to grow at a CAGR of 8.7% from 2024 to 2030. The European Union and individual countries invest heavily in infrastructure development, leading to increased construction activities and the need for specialized machinery. Investments in infrastructure projects create a favourable opportunity for construction equipment manufacturers and suppliers. Additionally, Europe is experiencing rapid urbanization, with an increasing number of people migrating to cities. Urban development projects, including residential and commercial construction, require a wide range of construction equipment. The need to accommodate the growing population, coupled with the revitalization of existing urban areas, drives the demand for construction equipment.

The construction equipment market in the UK accounted for a 21.6% revenue share of the Europe in 2023. The country growth is ascribed to factors such as the growing government spending under the U.K.’s “Net Zero Strategy" plans and "Build Back Greener". Through substantial investments in infrastructure, expertise, and innovation, the government's growth strategy, "Build Back Better," has assisted in the economic growth.

Germany construction equipment market is expected to grow at a CAGR of 9.5% from 2024 to 2030. In Germany, rising government investment in public infrastructure projects & 'Green Infrastructure Strategy' is anticipated to spur the growth of the construction equipment market. The German government under the federal ministry for housing, urban development, and building aimed at increasing the construction of homes.

The construction equipment market in France is projected to grow owing to the growing renewable energy projects, such as wind farms and solar installation requires construction machinery for site preparation, foundation work, and installation.

MEA Construction Equipment Market Trends

The construction equipment Market in the Middle East and Africa (MEA) region is anticipated to reach USD 13.66 billion by 2030. Substantial increase in government expenditures directed toward infrastructure development and large-scale projects in countries, such as Saudi Arabia, Egypt, the UAE, Kuwait, and Oman, is driving the growth of the MEA construction equipment. The construction industry in emerging nations across the region is experiencing a rapid expansion, creating a wealth of opportunities across residential, infrastructure, and non-residential construction.

The construction equipment market in Saudi Arabia is projected to grow due to support from the government through long-term economic diversification initiatives such as Saudi Vision 2030, the construction industry in Saudi Arabia has proliferated in recent years. By promoting the tourism sector, which entails building new hotels and commercial facilities, Saudi Arabia is diversifying its economic resources to lessen its dependence on crude oil exports.

Key Construction Equipment Company Insights

Some of the key players operating in the market include Caterpillar, Inc., Deere & Company, Sany Heavy Industry Co., Ltd., Komatsu Ltd., and Volvo Construction Equipment AB.

• Caterpillar, Inc. offers a comprehensive range of construction equipment, including dozers, loaders, and excavators, among others. The company’s machines are renowned for performance, durability, and innovative features.

• Deere & Companyheavily invests in research & development, introducing advanced technologies and innovative features in its construction equipment. The technological advancements help the company to maintain its competitiveness in the market.

Hyundai Construction Equipment Co., Ltd., HİDROMEK, and Kobelco Construction Machinery Co. Ltd. are some of the emerging market participants in the construction equipment market.

• Hyundai Construction Equipment Co., Ltd. is engaged in construction equipment manufacturer that covers material handling and construction equipment such as excavators, backhoe loaders, wheel loaders, forklifts, and skid loaders. It is also engaged in manufacturing construction equipment and heavy machinery, such as concrete mixers, bulldozers, cranes, pavers, dredging machinery, and power shovels, used by the construction industry.

• HİDROMEK is engaged in manufacturing of construction machinery and operates in Turkey. The company sells hydraulic excavators, backhoe loaders, motor graders, wheel loaders, and soil compactors. The company also caters to the used machinery and after-sales service requirements of customers.

Recent Developments

• In November 2023, Komatsu Ltd. through its subsidiary, Komatsu America Corp. agreed to acquire American Battery Solutions, Inc., a battery manufacturer based in the U.S. The acquisition of American Battery Solutions, Inc. would allow Komatsu Ltd. to manufacture and develop its own battery-operated mining and construction equipment by integrating American Battery Solutions, Inc.’s battery technology with Komatsu Ltd.’s expertise.

• In October 2023, CASE Construction Equipment, a brand of CNH Industrial N.V., launched a lineup of small articulated loaders and mini track loaders, providing small contractors with construction-grade power to tackle more jobs with less manual labor.

• In May 2023, Caterpillar Inc. unveiled the updated Cat D10 Dozer designed for tough construction environments and challenging job sites. The dozer incorporates a load-sensing hydraulics and stator clutch torque converter to effectively transmit power to the ground.

• In May 2023, Hitachi Construction Machinery Co., Ltd. launched ZAXIS-7 compact excavators designed to enhance task efficiency on urban work sites. The company also launched ZX75US-7 model that featured an ultra-short-tail swing radius, which allowed access to small spaces. In addition, the ZX85USB-7 model, with its swing boom and ultra-short-tail swing radius, enabled productive excavation near walls and guardrails.

Construction Equipment Market