Construction Equipment Market

Construction Equipment: A Comprehensive Guide

Construction equipment is an essential tool for any construction project. Whether you are working on a residential home, commercial building, or infrastructure project, having the right equipment can make all the difference in ensuring the job is completed safely, efficiently, and on time. In this comprehensive guide, we will explore the different types of construction equipment, their uses, and the benefits they offer.

Types of Construction Equipment

Construction equipment can be categorized into various types, each designed for a specific task. Here are some of the most common types of construction equipment:

• Excavators: These are heavy-duty machines used for digging, excavating, and moving large quantities of soil, rocks, and debris.
• Backhoes: These machines are similar to excavators but are smaller and more versatile. They are commonly used for digging, trenching, and loading.
• Bulldozers: These are powerful machines used for pushing and grading large quantities of soil and rock.
• Loaders: These machines are designed for loading and transporting materials, such as dirt, gravel, and debris.
• Cranes: Cranes are used for lifting and moving heavy objects, such as steel beams, concrete blocks, and other construction materials.
• Dump trucks: These trucks are used for hauling large quantities of materials, such as dirt, sand, and gravel.

Uses of Construction Equipment

Construction equipment has a wide range of uses in the construction industry, including:

• Earthmoving: Excavators, backhoes, and bulldozers are used for earthmoving, including digging, grading, and excavating.
• Material handling: Loaders and cranes are used for material handling, including loading, lifting, and transporting.
• Demolition: Bulldozers, excavators, and backhoes are commonly used for demolition, including tearing down buildings, structures, and other objects.
• Paving: Construction equipment is also used for paving, including laying asphalt and concrete.

Benefits of Construction Equipment

Using the right construction equipment can offer many benefits, including:

• Increased efficiency: Construction equipment can help speed up construction projects, reducing the time it takes to complete a job.
• Improved safety: Using construction equipment can reduce the risk of accidents and injuries on the job site, as the machines are designed to handle heavy loads and difficult terrain.
• Cost savings: Investing in construction equipment can provide long-term cost savings, as it reduces the need for manual labor and increases efficiency.
• Versatility: Many types of construction equipment are versatile and can be used for a wide range of tasks, making them a valuable investment for any construction company.

Market Dynamics of Construction Equipment

DRIVER: Growth in Infrastructure Developments to Increase the Sale of Construction Equipment

The construction equipment market has been growing steadily after the COVID-19 pandemic, thanks to the resumption of halted construction projects and planned investments in the construction sector as part of infrastructure development activities. Investments in infrastructure, residential and commercial buildings, and institutional capital expenditures worldwide are among the factors influencing the growth of construction equipment manufacturers. Countries such as the US, UK, China, and India have been increasing their construction activities in different areas. For example, the US government declared a $1 trillion plan in November 2021, with over 4,500 infrastructure projects underway and more than $100 billion in funding as part of the infrastructure investment package. As a result, planned investments and growing construction activities for infrastructure development are expected to drive the demand for construction equipment during the forecast period.

RESTRAINT: International Trade Policies and Regulations

Policies and regulations on the manufacturing, import, and export of construction equipment differ from country to country. Governments impose various import duties for international trade to avoid unfair competition and provide an advantage to local manufacturers. Typically, governments enter into bilateral trade agreements with other countries to reduce tariffs and barriers to a free trade area or common market. While this can be beneficial, it can also lead to increased competition from abroad. Foreign affairs also significantly impact trade activities. In the event of disputes with other countries, trade agreements may get suspended, or in extreme cases, restrictions may be imposed, which limits trade altogether. Therefore, the impact of international trade policies and regulations creates restraining factors for the sale and development of the construction equipment market in many countries.

OPPORTUNITIES in Construction Equipment Market

The construction equipment market is witnessing technological advancements that are aimed at producing more reliable and optimized products. The demand for automated solutions is on the rise as they help to improve productivity with minimal effort and fewer errors. The off-highway operating vehicle segment is gradually adopting autonomous operating technology, which is gaining popularity in the construction industry due to the repetitive, physical, precise, and time-sensitive nature of the tasks involved. This has resulted in an increased demand for the development of autonomous construction equipment. Manufacturers are working on developing autonomous construction equipment that operates on wireless communication technologies by interfering with radio signals from other equipment, receiving commands, and reporting status. This assures improved safety, increased productivity, and reduced unscheduled maintenance, thus creating an opportunity for the construction equipment market to grow during the forecast period.

CHALLENGES in Construction Equipment Market

However, implementing IoT devices and remote-control software with online connectivity to semi-autonomous and autonomous construction equipment can increase the threat of cyber-attacks. The use of radio frequency-controlled heavy construction equipment is biased towards safety rather than security, according to a report titled "A Security Analysis of Radio Remote Controllers for Industrial Applications, 2019" by Trend Micro Research (TMR). The automation technology is vulnerable to attacks such as malicious reprogramming, e-stop command, command injection, and replay commands, which pose significant threats to the construction industry. Therefore, the fear of cyber-attacks is a significant challenge facing the development of autonomous construction equipment in the industry.

The construction equipment market is expected to witness significant growth in the coming years. One of the key equipment types in this market is wheeled loaders <80 HP. These loaders are primarily used for loading, unloading, and bulk material movement in construction, quarry, and crushers. With a market share of 25% in 2023, wheeled loaders <80 HP are the second-largest segment in the construction equipment market. The increasing demand for infrastructure development projects such as roads, highways, railways, dams, ports, and airports has further boosted the demand for these loaders. Additionally, these loaders are known for their low-cost, compact size, and low maintenance, making them a popular choice for construction activities.

Another important segment in the construction equipment market is material handling equipment. This equipment is used for storing, controlling, and protecting materials, goods, and products in manufacturing, distribution, consumption, and disposal. The material handling equipment category, which includes articulated and rigid dump trucks, is expected to be the second-largest segment during the forecast period. The rising industrial construction activities and the development of commercial projects are the key drivers of the material handling equipment category. These equipment types are essential for transporting heavy rods, bricks, sands, debris, soil, and other such materials at construction sites.

Overall, the construction equipment market is witnessing significant growth, with wheeled loaders <80 HP and material handling equipment being the key segments. With the increasing demand for infrastructure development projects and the growth of industrial and commercial construction activities, the demand for construction equipment is expected to rise in the coming years.

During the forecast period, Asia is expected to have the largest market share in the construction equipment market due to significant investments in construction projects in emerging economies such as India and Indonesia. Moreover, countries like China and Japan are also undertaking various new infrastructure development initiatives. Additionally, many global construction equipment OEMs have their operations base in the region, further fueling growth. However, the COVID-19 pandemic had a negative impact on the construction industry in 2020, resulting in supply chain disruptions and temporary shutdowns of dealer stores, leading to a decline in new equipment purchases. But in 2021, the construction industry witnessed a surge in demand for equipment, with the resumption of construction activity and lower housing rates driving demand. However, with the rising number of COVID-19 cases due to the Omicron variant, high prices of steel and aluminum, and semiconductor shortages causing market uncertainty, the construction equipment market is expected to witness a slowdown in sales in the next few quarters of 2023.

In the coming years, the use of electric construction equipment is expected to generate new revenue streams for OEMs (Original Equipment Manufacturers). Electric equipment operates on batteries and offers several advantages, such as reduced maintenance requirements, lower noise and vibration levels, and increased comfort for field laborers. Although still in its early stages, the use of electric equipment is expected to grow during the forecast period. Caterpillar, AB Volvo, and Komatsu are among the OEMs that have already introduced wheel loaders and small electric excavators in the market. However, the high upfront cost of electric equipment is expected to be a hurdle for its adoption during the forecast period.

The increasing investment in construction worldwide is a long-term factor that is expected to boost the sales of the construction equipment market during the forecast period. In recent years, building investment in the United States has witnessed a significant surge. Similarly, multi-family dwelling development projects starting in Q3 2021 are expected to drive the expansion of the construction equipment market in Europe. These projects include ZAC Campus Grand Parc and Milanosesto Complex in France and Italy, respectively, and Camden Goods Yard, Viadux, and Sackville Road Residential Community in the UK. Furthermore, government initiatives to replace aging public infrastructure, such as railway tunnels, port extensions, and undersea tunnels connecting important European states, are expected to accelerate the market expansion.

In 2023, the earthmoving machinery segment is expected to dominate the construction equipment market and account for over 49% of the revenue share. Within this segment, the excavators sub-segment is projected to expand at a moderate CAGR due to an increase in infrastructure projects and the use of traditional heavy-duty excavators for building highways and dams. Additionally, the material handling equipment segment is predicted to register a 5% CAGR over the forecast period. This growth is attributed to the increase in demand for crawler cranes to construct non-residential sectors, particularly in industrial, manufacturing, and commercial building sectors.

Furthermore, the material handling machinery segment is anticipated to grow at a CAGR of 14% throughout the forecast period. The sub-segment forklift is experiencing a surge in the e-commerce industry, which has led to an increase in the number of warehouses and the need to manage the supply chain efficiently. Warehouse owners are focusing on improving transparency, lowering operational costs, and enhancing productivity, which is driving demand for forklifts such as stand-up riders and narrow-aisle forklifts that offer high operation accuracy and better navigation in narrow aisles, tiers, and mezzanines.

Technological innovations and improvements in construction equipment are expected to provide growth opportunities for players in the construction equipment market. Major players in the industry, such as Doosan Corporation, are launching equipment with various improved features, including proprietary telematics systems that allow users to remotely monitor and maintain their machines. Automation is also being widely adopted in the construction industry, as it reduces operational costs and can work in places where it may be harmful to the operator's health. Companies like Doosan, Hitachi, Sandvik, and Caterpillars are offering a wide range of automated construction equipment that is likely to improve operations and create opportunities for an upsurge in the construction equipment market during the forecast period.

The construction equipment market is segmented based on various factors, such as solution type, equipment type, type, application, end-user, and region. The market is divided into products and services in terms of solution type. In 2023, the products segment dominated the construction equipment market in terms of revenue, while the services segment is expected to grow significantly during the forecast period. The products segment includes construction machinery such as loaders, dozers, excavators, cranes, and forklifts, while the services segment includes vehicle repair, inspection, maintenance, and training for operators. Construction equipment manufacturers and distributors are generating a considerable portion of revenue by providing services and replacement parts related to construction equipment.

The construction equipment market is classified into heavy construction equipment and compact construction equipment in terms of equipment type. The compact construction equipment market is expected to grow rapidly during the forecast period, as it is small in size and has less capacity, making it suitable for small jobs and jobs in constrained spaces. Due to its smaller size, the acquisition and maintenance cost of compact construction equipment is less than that of heavy construction equipment. Heavy construction equipment, on the other hand, is used for activities such as excavation, heavy lifting, tunneling, and material handling. In 2021, heavy construction equipment held a significantly larger share of the construction equipment market.

The construction equipment market is also categorized based on type, which includes wheel bulldozers, front loaders, dump trucks, backhoe loader, grader, crawler dozers, compactors, excavators, forklifts, concrete mixer truck, and others. Moreover, based on application, the market is divided into excavation & mining, lifting & material handling, earth moving, transportation, and others. By end-user, the market is segmented into oil & gas, construction & infrastructure, manufacturing, mining, and others. Finally, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA in terms of region.

The construction equipment market has undergone significant developments in recent times, driven by various factors such as increased demand for infrastructure development, growing urbanization, and technological advancements. The market has witnessed a surge in demand for various types of equipment, including earthmoving machinery, material handling equipment, concrete and road construction machinery, and others.

One of the recent developments in the construction equipment market is the growing adoption of electric-powered machines. The need for eco-friendly equipment and the advantages offered by electric equipment, such as low operating costs, low noise levels, and reduced emissions, have led to increased demand for electric construction equipment. For instance, in November 2021, Caterpillar Inc., a leading player in the construction equipment market, launched its first-ever electric compact wheel loader, the Cat 903E, which is designed for use in urban construction and landscaping projects.

Another significant development in the construction equipment market is the increasing use of automation and artificial intelligence (AI) in construction equipment. Construction companies are increasingly adopting automated equipment to improve efficiency, productivity, and safety at construction sites. For instance, Volvo Construction Equipment has developed an autonomous excavator that uses AI and machine learning to navigate and operate in various conditions.

Moreover, the adoption of telematics and IoT-based technology is also driving the growth of the construction equipment market. Telematics technology enables remote monitoring and tracking of construction equipment, which helps in reducing maintenance costs, optimizing fuel consumption, and improving equipment uptime. IoT-based technology is also being used to enhance equipment safety, reduce downtime, and improve operational efficiency.

The market has also witnessed various product launches, partnerships, and collaborations in recent times. For instance, in December 2021, Deere & Company announced a strategic partnership with Intel Corporation to develop next-generation construction equipment with AI and IoT-based technology. Similarly, in September 2021, JCB launched its new electric excavator, the 19C-1E, which is powered by a lithium-ion battery and has zero emissions.

Overall, the construction equipment market is undergoing significant developments, driven by the increasing demand for infrastructure development, technological advancements, and the need for eco-friendly equipment. These developments are expected to create lucrative growth opportunities for players operating in the construction equipment market in the coming years.

Dominating Companies in Construction Equipment Market

• CATERPILLAR
• KOMATSU LTD.
• DEERE & COMPANY
• HITACHI CONSTRUCTION MACHINERY CO., LTD.
• AB VOLVO
• CNH INDUSTRIAL N.V.
• LIEBHERR
• XUZHOU CONSTRUCTION MACHINERY GROUP
• SANY GROUP
• DOOSAN ENERBILITY
• JCB
• TEREX CORPORATION
• ZOOMLION HEAVY INDUSTRY SCIENCE & TECHNOLOGY CO., LTD.
• KOBELCO CONSTRUCTION MACHINERY CO., LTD.
• KUBOTA CORPORATION
• YANMAR HOLDINGS CO., LTD.
• SUMITOMO HEAVY INDUSTRIES, LTD.
• SUMITOMO HEAVY INDUSTRIES CONSTRUCTION CRANES CO., LTD.
• SUMITOMO CONSTRUCTION MACHINERY CO., LTD.
• ATLAS COPCO AB
• SANDVIK AB
• AMMANN GROUP
• THE MANITOWOC COMPANY, INC.
• ASTEC INDUSTRIES, INC.
• LIUGONG MACHINERY CO., LTD.
• HYUNDAI CONSTRUCTION EQUIPMENT CO., LTD.
• DINGSHENG TIANGONG CONSTRUCTION MACHINERY CO., LTD.
• ESCORTS LTD.
• JLG INDUSTRIES
• SHANTUI CONSTRUCTION MACHINERY CO., LTD

Recent Developments in Construction Equipment Market

In 2020, Volvo Construction Equipment and SDLG, a Chinese construction equipment manufacturer, announced that they would merge their businesses in China to create a single company. The new entity would be called Volvo SDLG and would focus on developing and manufacturing construction equipment for the Chinese market.

In 2021, Komatsu announced that it would acquire Immersive Corporation, a provider of virtual and augmented reality solutions for training and simulation in the construction industry. The acquisition was aimed at enhancing Komatsu's smart construction initiatives by providing immersive training and simulation technologies.

In 2019, Wacker Neuson, a German construction equipment manufacturer, announced that it had formed a strategic partnership with John Deere, a US-based manufacturer of agricultural and construction equipment. The partnership was aimed at expanding Wacker Neuson's product offering in North America by leveraging John Deere's dealer network.

In 2019, Caterpillar announced that it had acquired Marble Robot, a provider of autonomous mobile robots for the construction industry. The acquisition was aimed at enhancing Caterpillar's technology capabilities in the construction industry and accelerating the development of autonomous construction equipment.

In 2021, Doosan Infracore, a South Korean construction equipment manufacturer, announced that it had formed a joint venture with Hyundai Heavy Industries, another South Korean manufacturer of construction equipment. The joint venture was aimed at developing and manufacturing electric construction equipment, including excavators and wheel loaders.

In November 2021, Volvo Construction Equipment announced that it has acquired Eureqa, a leading manufacturer of automated wheel loader technology. The acquisition is expected to enhance Volvo's leadership in autonomous construction equipment and improve the company's efficiency and productivity.

In September 2021, Hitachi Construction Machinery announced that it will acquire KTEG Kiesel Technologie Entwicklung GmbH, a German manufacturer of small construction equipment. The acquisition is expected to strengthen Hitachi's product lineup in the compact construction equipment market and enhance the company's competitiveness in Europe.

In July 2021, Wacker Neuson and John Deere announced a strategic alliance to jointly develop and market compact construction equipment for the North American market. The partnership is expected to enable both companies to expand their product offerings and reach new customer segments.

In May 2021, Doosan Infracore announced that it will acquire Bobcat Company, a leading manufacturer of compact construction equipment, from its parent company, the North Dakota-based Doosan Bobcat. The acquisition is expected to strengthen Doosan Infracore's presence in the compact construction equipment market and enhance the company's competitiveness in North America.

In April 2021, Caterpillar announced that it has acquired Weir Oil & Gas, a leading provider of pressure pumping and pressure control equipment and services for the oil and gas industry. The acquisition is expected to expand Caterpillar's offerings in the oil and gas industry and increase the company's revenue stream.

Construction equipment is an essential tool for any construction project, offering increased efficiency, improved safety, cost savings, and versatility. Whether you are working on a small residential project or a large infrastructure project, investing in the right construction equipment can help ensure your project is completed safely, efficiently, and on time. So, make sure to choose the right equipment for your project and reap the benefits it offers.