Global Construction Equipment Market Set for Rapid Expansion
The global construction equipment market is on track for substantial growth, a report says.
According to the analysis in a recent market report by MMRA, a construction equipment market analysis firm, the industry is expected to reach US$194.10bn by 2030, fuelled by urbanisation and infrastructure development worldwide.
This projection indicates an increase of US$263.80bn over the next decade.
China, India, the US and Indonesia are expected to contribute 60% of market growth during the forecast period, according to the report.
This growth is attributed to massive government investments in public infrastructure projects across North America, Europe and Asia Pacific.
The report highlights ongoing and planned smart city initiatives as key drivers of construction activity, increasing demand for advanced machinery and equipment.
These projects encompass the development of roads, highways, schools and hospitals.
Major players in the construction equipment market include Caterpillar, a US-based manufacturer of construction and mining equipment; Hitachi Construction Machinery, a Japanese producer of excavators and dump trucks and Komatsu, another Japanese multinational corporation that manufactures construction, mining and military equipment.
However, the report notes that strict government regulations on carbon emissions and fluctuations in oil prices are constraining market growth.
Despite these challenges, rising residential property prices and increased housing demand are driving new investments in the industry.
Construction equipment growth: worldwide urbanisation and infrastructure development
The report identifies growing urbanisation as a key factor driving demand for housing projects, particularly in developing countries such as China, India and Brazil.
This population shift is necessitating the construction of new housing infrastructure, including single-family homes and high-rise buildings.
Data from the World Bank Group shows that India's urban population increased from 27.7% of the total population in 2000 to 35.8% in 2023.
The report authors state that "developing nations are expected to drive the construction equipment market during the forecast period due to ongoing government support and significant investments in modernising public infrastructure."
Globally, infrastructure development is gaining momentum.
The report cites the US government's announcement of a US$1tn infrastructure investment package in November 2022, with 4,300 projects already underway and more than US$110bn in funding allocated.
Similar initiatives are underway in other countries.
The UK government, for instance, announced in September 2022 plans to invest over US$900bn in public and private infrastructure over the next decade.
Construction equipment growth: technological advancements and environmental concerns
The construction equipment industry is experiencing significant technological advancements, with a growing focus on electric and autonomous equipment.
The report reveals that while fully autonomous equipment is not yet a reality, the industry is moving in this direction.
"Construction companies are expected to benefit from autonomous equipment if they want to enhance productivity, improve the skilled labour shortage and increase worker safety on the job site," the report states.
Environmental concerns are also shaping the industry, prompting the development of eco-friendly engines with reduced emissions.
The report highlights that the construction equipment industry is "unmistakably moving toward electromobility and autonomous solutions on a global scale, using technologies like IoT, virtual reality and self-learning machines."
However, the report also notes that changing trade policies, regulations and environmental concerns pose challenges to the industry.
Different import taxes and trade agreements can impact competition and market growth.
"The effects of global trade laws and policies operate as barriers to the growth and sale of the construction equipment industry in many nations," the report concludes.
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