Published on: December 12, 2019
Construction machinery refers to mechanized equipment that are designed to perform construction-related operations such as earthmoving, material handling, road construction, and other general construction operations. The global construction machinery market has been categorized as part of the global construction machinery and heavy trucks market. The global construction machinery and heavy trucks market includes manufacturers of heavy-duty trucks, rolling machinery, earth-moving and construction equipment, and manufacturers of related parts. The market also includes machinery used for non-military shipbuilding applications.
The global construction machinery market is expected to reach USD 193.7 billion by 2024, growing at a CAGR of 6.2%. Based on product type, earthmoving machinery dominates the global construction machinery market, driven by the growing emphasis on improvements in infrastructural facilities in the public as well as private sectors worldwide. APAC is the key contributing region in the global construction machinery market. Factors such as the rising number of construction projects in APAC, and the growing emergence of countries such as China as manufacturing hubs are expected to aid market growth in APAC during the forecast period. Trends such as growing popularity of construction machinery rentals are expected to characterize market growth during the forecast period.
Many factors are expected to influence growth in the global construction machinery market during the forecast period. Our analysis identifies the following factors to be driving the growth of the global construction machinery market:
Factors such as rising per capita income worldwide have aided spending in infrastructural facilities related to sanitation, hospitals, and clinics, schools, power transmission, and rudimentary transport. Additionally, countries such as China, India, Italy, Russia, Germany, and the US are witnessing considerable investment in tunnel infrastructure. Although the penetration of tunnel automation in the developing countries is relatively less, as compared with the developed countries, the developing countries are expected to show the highest growth during the period due to continued investment in technological development in infrastructure projects.
Reliable and good quality infrastructure is a prominent enabler for sustainable socio-economic development of any country globally as it attracts foreign direct investment (FDI) and modernizes the economy. Thus, several countries globally are investing in initiatives to develop infrastructure. For instance, India has allocated USD 63.2 billion for its infrastructure development, which would include the construction of highways, renewable energy plants, and urban transportation infrastructure. Similarly, in 2019, the highway construction activities are expected to witness a significant upsurge in the US, which will accelerate the market growth of construction machinery. Thus, the increasing frequency of such construction projects is expected to drive the demand for construction machinery during the forecast period.
To cater to the growing demand for construction machinery products worldwide, companies are focusing on expanding their production capabilities. Some of the recent investments by various companies in production capacity expansion projects include Kawasaki Heavy Industries Ltd.’s new hydraulic equipment plant in Bengaluru, India, and Liebherr-International Deutschland GmbH’s ongoing expansion of its Newport facility in Virginia, US. Such expansions in manufacturing capacities are expected to fuel the growth of the global construction machinery market during the forecast period.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
Volatility in crude oil prices is one of the biggest challenges, as an uncertain price environment has a severe impact on investments, consequently affecting the demand for construction vehicles. Also, the volatility in global oil and gas prices can directly affect the contract prices of construction vehicles and machinery, resulting in low profitability or unsustainable operations.
The adoption of new and improved emission norms provides a significant challenge in a few developing economies in APAC and MEA, which are still highly dependent on diesel and gasoline-powered construction machinery.
As many manufacturing industries are moving to APAC due to low-cost manufacturing facilities in the region, second-hand machines from the US and Europe are increasingly being used in APAC, especially in emerging economies such as India and Pakistan. By using second-hand machines, contractors can control their capital investments as these machines are available at affordable prices. The growing second-hand machine market will limit the demand for new construction machinery during the forecast period.
The global construction machinery market can be segmented into the following:
The global construction machinery market is fragmented with the presence of international and regional players. We provide a detailed analysis of around 25 vendors operating in the global construction machinery market, including some of the prominent vendors such as AB Volvo, Caterpillar Inc., Deere & Co., Hitachi Construction Machinery Co. Ltd., and Liebherr-International Deutschland GmbH. Mergers, acquisitions and partnerships, and investments in new facilities are among the strategies adopted by manufacturers in the global construction machinery market.
Backed with competitive intelligence and benchmarking, our global construction machinery market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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