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The construction equipment market size is forecasted to increase by USD 3.79 billion, at a CAGR of 5.21% between 2023 and 2028. The market is experiencing significant growth, driven by the rising number of new construction equipment launches and increasing adoption of electric construction equipment. These trends are fueled by the need for more efficient, sustainable, and technologically advanced solutions in the construction industry. Additionally, the development of smart highways and the integration of parking sensors are enhancing the functionality and efficiency of infrastructure projects. However, the high initial cost and maintenance of construction equipment pose challenges for market growth. Manufacturers are addressing these challenges by offering financing options, extended warranties, and preventative maintenance programs to attract customers. Furthermore, the increasing demand for infrastructure development and urbanization projects in emerging economies is expected to further boost market growth. Overall, the market is poised for continued expansion, with a focus on innovation, sustainability, and cost-effective solutions.
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The Market encompasses a wide range of machinery used in various sectors including infrastructure, sustainable projects, and more. Infrastructure projects are a significant contributor to the market's growth, with road infrastructure and national highway projects being major areas of focus. Electric construction equipment, such as battery-powered machines, are gaining popularity due to their eco-friendliness and efficiency. Autonomous machinery and technological integration are also trending, offering increased productivity and precision. Diesel engines continue to dominate the market, but emission laws are driving the shift towards hybrid dump trucks and other alternative power sources. The market caters to various industries such as mining, agriculture, forestry, material handling, waste management, municipal services, and more. Construction activities require diverse equipment like forklifts, pavers, and dozers, among others. The integration of advanced technology in construction machinery is transforming the industry, making it more efficient and productive. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The expanding manufacturing and distribution facilities are driving the market growth. Companies are focusing on expanding their production capabilities to cater to the growing demand for construction tools globally. An increase in production capacity helps companies cater to the demands of customers across the world. Therefore, various companies are investing in expansion projects. For instance, in 2021, Volvo Group expanded its parts distribution network in Western US. Similarly, in April 2022, Joseph Cyril Bamford Excavators Ltd (JCB) announced that it would open a new manufacturing plant in Gujarat, India.
Moreover, manufacturers in the construction industry focus on providing convenient services to their consumers and are expanding their manufacturing capabilities for easy maintenance and repair. This can help them differentiate themselves from their rivals and increase revenue growth in the long run. Thus, the expansion of manufacturing and distribution facilities by various companies is expected to fuel the growth of the market during the forecast period.
The emergence of smart cities is a key trend in the market. Smart cities require the integration of information and communication and the adoption of the latest technologies for effective management of operations. The emergence of smart cities leads to developments in functional areas such as transportation, traffic management, energy efficiency and sustainability, and governance. An increase in the number of smart city projects globally will fuel the need for the installation of road safety tools in advanced road network systems. This will create growth opportunities for vendors operating in the market.
Moreover, aligned with market trends and analysis, the Association of Southeast Asian Nations (ASEAN) has created a collaborative platform to strengthen the vision of smart city projects. Efficient waste management, smart streetlights, smart highways, parking sensors, and improved security are a few major objectives of smart cities. Thus, the increase in the number of smart cities across the globe will support the growth of the market during the forecast period.
Stringent regulations on the construction industry are challenging market growth. Countries are focusing on combating climate change and are making manufacturing and construction processes cleaner and greener. This has compelled environmental bodies across the world to come up with stringent emission regulations for factories, production facilities, waste management, machinery, and equipment. For instance, the EU has announced a Stage V exhaust emission regulation, which limits the emission of PM g/kWh to 0.015 to 0.4 oxides of nitrogen (Nox) g/kWh. It also requires vendors to install additional parts, such as DPF, in the equipment.
Thus, the need to comply with new and strict emission regulations introduced by various countries adversely affects the profit margins of various manufacturers. The design and manufacturing of machinery should comply with new norms that require manufacturers to equip machinery with new components. However, this results in increased costs, which will limit the growth of the market during the forecast period.
The owned equipment segment will account for a significant share of market growth during the forecast period. The segment comprises machines that are owned by construction companies, contractors, and other stakeholders. These machines are used for various construction activities, such as excavation, transportation, lifting, and material handling. The machines in this segment include excavators, loaders, bulldozers, and cranes. The growth of this segment can be attributed to factors such as infrastructure development in emerging economies, increasing urbanization, and growing demand for residential and commercial properties.
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The owned equipment segment was valued at USD 5.74 billion in 2018. The growing trend of renting tools has also boosted the owned segment's growth. Many companies and contractors prefer to own their machines instead of renting them to save costs. This trend has led to an increase in the demand for owned segment. These factors will drive the growth of the segment during the forecast period.
The commercial segment will account for a significant share of market growth during the forecast period. This segment consists of commercial buildings, such as shops, hotels, restaurants, office spaces, industrial buildings, schools, and hospitals. In the Middle East, the commercial segment is registering growth in countries such as the UAE, Qatar, and Saudi Arabia owing to the strong investments in the commercial sector. For instance, in June 2021, Enable Midstream Partners, LP, announced that it had received approval from FERC to construct and operate the Gulf Run Pipeline project. In addition, the emergence of multinational companies has led to a rise in the number of employees and office spaces globally. The rising number of technological and business parks is triggering the demand in commercial spaces, which is expected to increase during the forecast period.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Another region offering significant growth opportunities is APAC. Growing construction activities in emerging countries such as India, Afghanistan, and Bangladesh are driving the growth of the market in APAC. This market is expected to grow steadily during the forecast period owing to the demand for new infrastructure to provide residential and commercial spaces for the growing urban population. Developing nations such as India, Indonesia, and Thailand are investing significantly in infrastructure development. For instance, in 2019, the Government of India made plans to invest USD 350 billion toward road infrastructural development in the Northeast region of the country during 2020-2025. The plan is aimed at improving the country's economy. Such investments are expected to fuel the growth of the regional market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market report also has detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
The market analysis and report offers clients a deeper understanding of the market and its players through a combined qualitative and quantitative analysis of the vendors. The analysis classifies vendors into categories based on their business approach, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak to understand the dos and don’ts of business which in turn can help a client make the best decision.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market is a significant sector that caters to the demand for infrastructure development. This market encompasses a wide range of equipment used in various sectors such as Infrastructure projects, Mining, Agriculture, Forestry, Material handling, Waste management, Municipal services, and more. The market includes Heavy equipment like cranes, bulldozers, and excavators, as well as Compact construction equipment for smaller projects. Sustainable projects are increasingly driving the demand for Electric construction equipment, Autonomous machinery, and Battery technology. Emission laws are a major factor influencing the shift towards Fuel-efficient equipment and Hybrid dump trucks. Moreover, the Equipment rental industry plays a crucial role in providing access to advanced equipment for construction activities, especially during closure periods. Further, public spending, Urban migration, and Trade agreements are key drivers for the Market. Smart city development and Industrial application also contribute significantly to the market growth. Construction Leadership Council emphasizes Equipment efficiency and the importance of Rental services in optimizing costs. Mining, Housing projects, Commercial infrastructure, and Road infrastructure are major industries utilizing Construction machinery.
Also, the market caters to the needs of various sectors like Automated equipment for Material handling and Waste management, and Heavy construction equipment for large-scale projects. In conclusion, the Market is a dynamic and diverse sector, catering to the needs of various industries and sectors, while adapting to changing environmental regulations and technological advancements. The market is influenced by factors such as construction activities closure, environmental imbalance, and ozone emissions. Infrastructure investments and foreign direct investments (FDI) drive demand for OEMs (Original Equipment Manufacturers) and material handling machinery. Internal combustion engine (ICE) technologies are being complemented by autonomous vehicle technology. The market also sees growth in rental equipment, product quality, and heavy machinery for renewable energy projects and automation. Greenhouse gas emissions, smart grids, and long-term contracts are shaping industry trends.
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Market Scope |
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Report Coverage |
Details |
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Page number |
185 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.21% |
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Market growth 2024-2028 |
USD 3.79 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
4.68 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 32% |
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Key countries |
US, China, India, Japan, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AB Volvo, Action Construction Equipment Ltd., Caterpillar Inc., CNH Industrial NV, Deere and Co., Doosan Corp., Escorts Ltd., Guangxi Liugong Machinery Co. Ltd., Hitachi Construction Machinery Co. Ltd., HD Hyundai Construction Equipment Co. Ltd., J C Bamford Excavators Ltd., Kobe Steel Ltd., Komatsu Ltd., Liebherr International AG, Manitou BF SA, Sany Group, Sumitomo Heavy Industries Ltd., Terex Corp., Xuzhou Construction Machinery Group Co. Ltd., and Zoomlion Heavy Industry Science and Technology Co. Ltd. |
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Market dynamics |
Parent market analysis, market growth analysis, market research and growth, market forecasting, market growth and trends, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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