Construction Equipment Market Size & Forecast

The Construction Equipment Market is expected to reach over $236.9 billion by 2031, at a CAGR of 5.3% from 2024 to 2031. The growth of this market is driven by increasing government spending on construction and infrastructure development and the increasing need to enhance efficiency, productivity, and safety in construction projects. Furthermore, the increasing automation of construction equipment is expected to create market growth opportunities. However, stringent international trade policies and mandates, coupled with the high cost of construction equipment, may restrain market growth. Additionally, the lack of skilled equipment operators is a major challenge impacting the market's growth.

Furthermore, the increasing demand for compact construction equipment and the rising adoption of electric construction equipment are prominent trends in the construction equipment market.

Construction Equipment Market Growth Drivers

Increasing Government Spending on Construction and Infrastructure Development

Increasing government spending on upgrading existing infrastructure is driving construction activities in developing countries. The infrastructure sector plays a crucial role in driving a country's economic growth and overall development. Governments worldwide are prioritizing infrastructure needs and implementing various schemes and policies to address them. For instance, in March 2023, the Singaporean government announced plans to commence construction of the new Terminal 5 (T5) at Changi Airport in 2025. Similarly, in June 2022, the Indian Minister of Road Transport and Highways announced the inauguration of 15 new national highway projects worth USD 1.7 billion in Patna and Hajipur, Bihar. Therefore, the increase in construction activities is driving the demand for material handling and road construction equipment such as forklifts, pavers, and dozers, thereby further supporting the growth of the construction equipment market.

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Construction Equipment Market Growth Opportunity

Increasing Automation of Construction Equipment

Construction equipment has undergone significant evolution in the past decade, with manufacturers introducing innovations that have made equipment smarter, safer, and more productive. Presently, the industry is experiencing a transformative era marked by further advancements that are reshaping the operations of construction sites.

Autonomous construction equipment, including dozers, excavators, load carriers, and haul trucks, represents a groundbreaking development. These driverless machines can perform various tasks on construction sites, typically controlled by an operator via a remote-control program. This innovation has enabled many construction projects to be executed with minimal safety concerns and maximum efficiency. As technology continues to progress, the demand for autonomous machines is anticipated to increase worldwide.

Moreover, the growing focus of market players on the automation of construction equipment is expected to create market growth opportunities. For instance, in February 2024, ArcBest (U.S.) launched autonomous forklifts and reach trucks that can be operated remotely.

Therefore, the increasing automation in construction equipment is expected to offer significant opportunities for the growth of this market during the forecast period.

Construction Equipment Market Trends

Growing Demand for Compact Construction Equipment

Compact and mini construction equipment are small-sized machines used for a variety of construction tasks. They are typically smaller and lighter than standard-sized construction machines but still offer a range of features and capabilities. This equipment is often used for landscaping, site preparation, and other tasks that require less power and less space.

Compact construction equipment is a versatile, cost-effective, and safe solution for many projects. The most common types of compact construction equipment include mini excavators, skid steers, mini loaders, compact wheel loaders, and compact backhoes. The most obvious benefit of using compact construction equipment is cost savings. These machines are often smaller and less powerful than larger models, significantly reducing purchase and maintenance costs. They are also much easier to transport, store, and operate, making them ideal for small-scale projects. Additionally, compact construction equipment can be used in areas with limited access or space constraints.

The benefits offered by compact construction equipment have prompted several market players to launch new products and expand their offerings. For instance, in November 2023, SANY Group (China), a prominent company in the construction equipment industry, launched five new compact excavators to its lineup, showcasing the company's commitment to innovation and meeting diverse customer needs. Such initiatives by market players are expected to drive the adoption of compact construction equipment during the forecast period.

Rising Adoption of Electric Construction Equipment

According to Danfoss (Denmark), construction machines worldwide emit a staggering 400MT of CO2 annually, equivalent to emissions from international aviation. The trend toward adopting battery-powered construction equipment is increasing internationally, driven by the implementation of stricter emission regulations. Governments and regulatory bodies worldwide are enacting more stringent emission standards for non-road diesel engines used in construction, making it increasingly challenging for construction companies to operate diesel-powered equipment.

In addition to stricter regulations on emissions and noise levels, the high cost of diesel fuel is also a significant factor driving the trend toward electric solutions. As fuel prices continue to rise, OEMs are seeking ways to reduce costs and maintain competitiveness. Electric construction equipment offers a more efficient and cost-effective solution, consuming less energy and incurring lower operating costs.

Various market players are launching new electric construction equipment, which is expected to drive market growth. For instance, in May 2023, Toyota Material Handling (U.S.) launched three new electric forklift models, expanding the company's industry-leading lineup of material handling products and solutions. This new electric product launch includes a Side-Entry End Rider, a Center Rider Stacker, and an Industrial Tow Tractor, providing customers with enhanced efficiency, versatility, and top-tier performance that prioritizes operator comfort.

Construction Equipment Market Analysis: Key Findings

By Type: in 2024, the Material Handling Equipment Segment to Dominate the Construction Equipment Market

Based on type, the construction equipment market is broadly segmented into material handling equipment, concrete and road construction equipment, earth-moving equipment, and other construction equipment. In 2024, the material handling equipment segment is expected to account for the largest share of 40.0% of the construction equipment market. This segment's large market share can be attributed to several factors, including the rapid pace of industrialization worldwide, ongoing modernization efforts in industrial infrastructures & facilities to augment production capacity, and the increasing demand for material handling equipment to facilitate smooth material movement, reduce reliance on manual labor, and enhance overall productivity. Moreover, market players' rising focus on product launches and enhancement contributes to the segment's growth. For instance, in October 2023, Hyundai Construction Equipment India strengthened its position in the infrastructure, mining, and material handling industry by launching multiple products, including four excavator models, two forklift models, and two-wheel loaders.

However, the earth-moving equipment segment is projected to register the highest CAGR during the forecast period. The growth of this segment is driven by increasing investments in residential, commercial, and industrial construction projects and the rising demand for earth-moving equipment for various purposes, including laying foundations, grading soil, removing dirt & rocks, digging trenches, and conducting demolition works. This increase in demand has prompted partnerships among various market players to expand their offerings. For instance, in January 2022, CanLift Equipment Ltd. (Canada) expanded its product line for construction machinery equipment through a strategic partnership with Xuzhou Construction Machinery Group Co., Ltd (China). This partnership aimed to enhance the sales of earth-moving equipment in Ontario.

By Propulsion Type: in 2024, the ICE Segment to Dominate the Construction Equipment Market

Based on propulsion type, the construction equipment market is segmented into ICE, electric, and CNG/LNG. In 2024, the ICE segment is expected to account for the largest share of 53.0% of the construction equipment market. This segment's large market share can be attributed to several factors, including the ease of use and high power-to-weight ratio offered by ICE construction equipment, the lower cost of ICE construction equipment compared to electric alternatives, and the increasing initiatives by market players to expand their product portfolios. For instance, in January 2023, Crown Equipment Corporation (U.S.) expanded its lift truck portfolio by launching IC and electric counterbalance forklifts capable of carrying up to 5.5 tons.

However, the electric segment is projected to register the highest CAGR during the forecast period. The growth of this segment can be attributed to the benefits offered by electric construction equipment, including lower operating expenses and minimal maintenance requirements. Additionally, supportive government initiatives aimed at promoting the adoption of electric construction equipment and the rising focus of market players on product launches and enhancement contribute to the growth of this segment. For instance, in February 2023, Action Construction Equipment Ltd. (India) announced the launch of its electric crane with a lifting capacity of 180 tons.

By End User: in 2024, the Construction Companies Segment to Dominate the Construction Equipment Market

Based on end user, the construction equipment market is segmented into construction companies, government agencies, private contractors, aerospace & defense companies, mining companies, and other end users. In 2024, the construction companies segment is expected to account for the largest share of 55.0% of the construction equipment market. This segment's large market share can be attributed to the increasing investments in infrastructure development globally, the growing adoption of advanced equipment by construction companies to enhance the speed and efficiency of construction projects, and the shortage of labor in the construction sector.

Moreover, the construction companies segment is projected to register the highest CAGR during the forecast period. The growth of this segment can be attributed to the increasing investments by leading companies in developing advanced construction equipment. For instance, in September 2023, Skanska (Sweden), a prominent construction and development firm, initiated a pilot project involving a zero-emissions electric excavator on the Los Angeles Metro's Purple (D Line) Extension Transit Project. The Volvo EC230, the largest electric excavator of its kind, is specifically designed to match the capabilities of a diesel excavator.

Geographical Analysis

In 2024, Asia-Pacific is expected to account for the largest share of 45.0% of the construction equipment market. Asia-Pacific's significant market share can be attributed to the increasing investments in construction projects, a rising focus on sustainability, efficiency, and safety within the construction industry, rapid growth in the real estate sector, and the expansion of rail and road infrastructure across the APAC region.

Moreover, the market in Asia-Pacific is projected to register the highest CAGR of 7.0% during the forecast period. The growth of this regional market can be attributed to the increasing demand for sustainable construction equipment and the rising initiatives by key market players to expand their presence in the region. For instance, in July 2023, Volvo Construction Equipment (Volvo CE) (Sweden) established a dealership in Kuching, Sarawak, located on the island of Borneo, to cater to the rising demand from Malaysian customers.

Construction Equipment Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players' product portfolios and geographic presence and key growth strategies adopted by them over the past 3–4 years. Some of the key players operating in the construction equipment market are Caterpillar (U.S.), CNH Industrial N.V. (U.K.), Deere & Company (U.S.), Doosan Corporation (South Korea), Hitachi Construction Machinery Co., Ltd. (Japan), J C Bamford Excavators Ltd. (U.K.), Komatsu Ltd. (Japan), KUBOTA Corporation (Japan), LIEBHERR (Switzerland), Volvo Group (Sweden), SANY Group (China), MANITOU Group (France), Wacker Neuson SE (Germany), Terex Corporation (U.S.), and Hyundai Construction Equipment Co., Ltd. (South Korea).

Construction Equipment Industry Overview: Latest Developments from Key Industry Players

• In October 2023, CASE Construction Equipment (Italy) 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 (U.S.) launched the enhanced Cat D10 Dozer, specifically engineered for demanding construction environments and challenging job sites. This dozer features a load-sensing hydraulic system and a stator clutch torque converter, ensuring efficient power transmission to the ground.
• In June 2023, Caterpillar (U.S.) unveiled the new 995 Wheel Loader, with a 19% increase in capacity compared to its predecessor. Additionally, it promises up to a 13% reduction in hourly fuel consumption and delivers an additional 8% efficiency gain.
• In June 2022, Komatsu Ltd. (Japan) collaborated with Cummins Inc. (U.S.) to develop zero-emission haulage equipment, leveraging their longstanding partnership in diesel engine technology across various mining and construction equipment.
• In March 2021, Hitachi Construction Machinery Co., Ltd. (Japan) launched the ZW220-7, a Stage V-compliant wheel loader. Weighing between 18,190-19,450kg and boasting a net power of 157kW (210hp), the ZW220-7 offers a heaped bucket capacity (ISO) ranging from 2.8 to 10.0 cubic meters.

Construction Equipment Market Research Summary:

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