Global heavy construction equipment market to reach $193,000 million by 2020

A new report published by Allied Market Research (AMR), Portland, Oregon, titled, Heavy Construction Equipment Market: Global Opportunity Analysis and Industry Forecast, 2014–2022, projects that the global heavy construction equipment market is expected to reach $193,245 million by 2022. Earthmoving equipment segment dominated the global market in 2015, and is expected to maintain this trend from 2016 to 2022. Asia-Pacific dominated the global market in 2015, accounting for a more than 44 percent share.

The global heavy construction equipment market is driven by factors such as improved involvement in private sector, tremendous growth in real estate sector, improved economic conditions and residential and commercial infrastructure set-up in emerging economies. According to the United Nation’s Department of Economic and Social Affair’s World Urbanization Prospect, about 54 percent of global population belonged to urban areas in 2014, and is expected to increase to 66 percent by 2050, thereby boosting the market growth.

Increasing government initiatives toward infrastructure development supplements the market growth. Moreover, growing public-private partnerships between government and private sector companies for the construction of public infrastructure systems in countries such as India and China have fueled the market growth. The Indian government has heavily invested in the development of roads, railway tracks, airports and overall infrastructure development, which involve the use of excavators, loaders and other such heavy machinery. Designing and developing smart, internet-enabled, fuel and energy-efficient machinery by key market players have fueled the market growth.

The growth of the heavy construction equipment market is hampered due to fluctuating prices of crude oil. Moreover, majority of the equipment that are used in the industry run on diesel, which release high carbon emissions and imposition of carbon regulations. This factor is likely to affect the growth of the market in the near future.

Increasing demand of heavy construction machinery in construction and manufacturing sectors would boost the growth of the excavator segment. Earthmoving segment accounted for around 45 percent share of the global market in 2015 owing to the increased use of these equipment in mining sector. This segment is estimated to witness significant growth during the forecast period due to increasing construction activities in residential sector, construction of roads, healthcare centers and educational institutes. Increasing use of equipment in sectors such as construction, underground mining and surface mining contributes to the market growth.

“The heavy construction equipment market is expected to grow due to increasing demand for leased and rented construction equipment by low- and mid-sized construction companies. The development of new earthmoving equipment offering reduced operating costs, connect technology, and safety features are expected to have substantial impact on the market growth. European decision makers have invested in the building and construction industries to facilitate gradual improvement in this sector and boost the market for new constructions; thereby fueling the growth of the heavy construction equipment market” says Eisha Sukhija, research analyst for the construction equipment research domain, AMR.

Based on application, the heavy construction equipment market is segmented into excavation and demolition, heavy lifting, material handling, recycling and waste management and tunneling. Excavation and demolition segment accounted for the largest share in 2015, as these techniques are extensively used for cutting, trenching and cracking purposes. Material handling segment is projected to grow rapidly, registering a compound annual growth rate (CAGR) of 8.4 percent during the forecast period due to increased usage of material handling equipment such as cranes and telehandlers in large building construction and mining operations. Market players have launched new products with higher engine power and lifting capacity to cater to the emerging demands of customers.

Infrastructure industry is expected to be the fastest growing industry, owing to proactive government initiatives related to infrastructure developments projects, including dams, railway ballast, airports, expressway and national highways in the Asia-Pacific region. Increased instances of renting and leasing of heavy construction equipment in both developed and developing regions, is expected to fuel the market growth.

Asia-Pacific region accounted for the maximum market share in 2015, and is expected to maintain its lead throughout the forecast period. This is attributed to increased usage of earthmoving equipment in construction application. Moreover, proactive government initiatives related to infrastructure developments in countries such as India, Indonesia and others have resulted in upsurge in foreign direct investment (FDI). In addition, construction of new buildings and the refurbishment/renovation of existing buildings drive the growth of the European heavy construction equipment market. European building and construction industry is moving out of crisis and is showing a gradual improvement which will increase the market for new construction.