Construction Equipment Market Size, Share & Analysis

Construction Equipment Market Size, Growth Report & Forecast

[471 Pages Report] The global construction equipment market worldwide size is valued at USD 149.7 billion in 2023 and is expected to reach USD 194.7 billion by 2030, at a CAGR of 3.8%. Construction equipment refers to heavy machinery that performs specific construction or demolition functions. This equipment is transportable, semi-permanent, or permanent and is primarily used for earthmoving, lifting containers or materials, drilling holes in the earth or rock, and concrete and paving applications. It is also used in other applications such as infrastructure, residential, commercial, and industrial buildings. Asia remains the key market for construction equipment, though the demand is also substantial in North America and Europe.

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Construction Equipment Market Growth Dynamics

DRIVER: Growth in infrastructure development globally and rising demand for compact construction equipment

According to Oxford Economics, the construction industry is expected to grow from USD 9.7 trillion in 2022 to USD 13.9 trillion in 2037, driven by significant construction markets such as China, the US and India. The industry’s growth is mainly driven by increasing urbanization, population growth, technological advancements, the need to modernize existing infrastructure, and increased focus on developing sustainable green projects. Further, the construction equipment market has grown gradually with an increase in new equipment sales due to increased construction projects and planned new investments in the construction sector.

As per the declaration in June 2022, the European Union would invest nearly USD 5.4 billion in transport infrastructure development. The European Union has selected around 135 infrastructure projects to disburse development funds. In China, 102 mega projects were included in Beijing’s 2021-25 development plan. In December 2021, China’s finance ministry declared it had offered local governments an early allocation of ~USD 229 billion in quotas for 2022 for special-purpose bonds to support infrastructure investments. According to the UK Construction Leadership Council, planned investments include 700 projects and over USD 645.7 billion in the National Infrastructure Pipeline. Such planned investments and growing construction activities for infrastructure development would drive the demand for construction equipment during the forecast period.

RESTRAINT: Regulations and International trade policies

Construction equipment manufacture, import, and export laws and restrictions vary by nation. Nations levy different import taxes to prevent unfair trade practices and benefit domestic producers. Most of the time, countries sign bilateral trade agreements with other nations to lower tariffs and obstacles to a free trade zone or one market. While useful, this can also result in more international competitiveness. The impact of foreign affairs on trade is more significant. If disagreements with other nations, trade agreements might be halted or, in the worst-case scenarios, limitations enforced, completely restricting commerce. Consequently, the effects of global trade policies and Regulations provide barriers to the selling and growth of the building industry. Thus, international trade policies and regional regulations are one of the critical restraints observed for the construction equipment market.

OPPORTUNITY : Government mandates telematics and e-call services

The construction equipment market is witnessing a lot of technological advancements for more optimized and reliable products. The off-highway industry is progressively embracing autonomous operating technologies. Construction activities are well-suited for autonomous machinery as the tasks are repetitive, physical, precise, and time-sensitive. Due to this, there is an increased need for automation in construction equipment. Manufacturers are creating wireless, autonomous construction machinery. using radio waves from other devices to obstruct communication technology, receive instructions, and report conditions. It guarantees enhanced production, decreased unplanned maintenance, and higher safety. Consequently, the growing popularity of autonomous construction equipment would present a business opportunity for the industry.  

Thus, the growing popularity of automation and electrification is expected to offer futuristic growth opportunities in the construction machinery industry.

CHALLENGE: Limited battery capacity in electric equipment would restrict optimized performance delivery

The battery is the heaviest component of an electric construction machine, and its size and weight can significantly impact the machine’s performance and maneuverability. Larger batteries can provide longer operating ranges but add weight and make the machine more difficult to transport and maneuver. Also, the cost of batteries is still a major barrier to adopting electric construction equipment. In recent years, lithium-ion batteries have been declining, but they are still expensive compared to traditional diesel engines. In addition to this,  the charging time for electric construction equipment can be a major inconvenience. Depending on the battery’s size and the charger’s power, it can take several hours to charge a battery fully. Using electric construction equipment on long or continuous jobs can make it difficult.

Thus, electric construction equipment battery threats are expected to pose a challenge for the construction equipment market.

Construction Equipment Market Ecosystem.

The construction equipment ecosystem comprises component suppliers, assembly lines, distribution and service, rental service components, and end users.

The ecosystem comprises component suppliers who supply engines and drivetrains and specialized suppliers for boom and cabin. These components are assembled at the second level of the ecosystem. This stage brings together components for the assembly and fabrication of construction equipment. At the distribution and service level, the dealer sells construction equipment independently without the intervention of the manufacturers.

Manufacturers directly deal with construction companies for sales. Rental services include construction equipment manufacturers who undertake both sales of new equipment and rental services, and the end user completes the ecosystem

“The Electric Dump Truck is expected to lead the electric & hybrid construction equipment segment.”

Electric dump truck is the largest market in the electric & hybrid construction equipment segment. Dump trucks, also known as dumpers, tipper dumpers, and tipper trucks, carry materials in surface and underground mining applications. Electric & hybrid dump trucks have emerged as a promising alternative to traditional diesel-powered vehicles owing to its range of advantages such as reduced or negligible fuel consumption, low noise, regenerative braking technology extending its driving range, and ability to handle heavy loads efficiently. The currently available battery technologies are undergoing tremendous developments and may not provide the required power output every time, so a majority of dump trucks are operating on hybrid-electric propulsion. The hybrid dump truck is powered by an additional electric motor, which delivers equivalent performance to counterparts with less fuel consumption and prevents electricity shortage in the case of pure electric dump trucks. Many companies are designing prototypes or pilot equipment showcased at trade shows or used at job sites to get real working experience. With the upcoming stringent emission laws in off-highway vehicles, such as China IV engine emission laws, the industry would anticipate a rapid shift towards electrification, driving the construction and mining equipment market demand for electric & hybrid dump trucks in future years.

The diesel propulsion type segment will lead the Construction Equipment market.

By propulsion type, the diesel segment is anticipated to hold the largest share at a global level in 2023. Diesel Construction machinery is conventional machinery with high penetration in the worldwide market due to its ability to provide substantial torque and consistent performance, essential to handle medium to heavy-duty tasks in any given working condition. Diesel engines are efficient and trustworthy options that deliver reliable performance. Further, as it is a well-tested and saturated technology, easy availability of spare parts and aftersales services, lower cost, and hassle-free maintenance make the diesel-powered equipment a suitable option. Alternatively, rising government stringent laws and rising development to reach zero emission targets are fuelling the demand for CNG/LNG/RNG alternatives; hence, this segment is experiencing a swift upsurge during the forecast period. However, it is still considered to have a limited share by 2030, and diesel will continue to dominate the global construction machinery market in the future.

“Infrastructure segment is anticipated to be the fastest-growing segment for construction equipment market, by application.”

The infrastructure segment is expected to grow at the highest CAGR from 2023 to 2030, owing to massive changes in infrastructural developments such as mega corridor projects and dams in developing and developed countries. Developmental activities in commercial and residential applications like the construction of commercial complexes, corporate offices, residential societies and buildings, construction of airports and ports, expansion of roads, and other activities are a significant part of the infrastructure development plans globally. Further, rapid urbanization has increased government infrastructure spending and increased construction activities for dams, roads, bridges, metro stations and railway tracks, airports, hydroelectric projects, and other activities. Infrastructural activities are projected to grow in the coming years as they are critical in improving connectivity and promoting sustainable growth. Heavy equipment and compact construction equipment, including small excavators and compact wheel loaders, have significant demand as they offer several advantages while operating on a range of tasks. Mini excavators are often lightweight, portable, easy to use, excellent for limited spaces, and may be used for interior demolition or construction projects. In Europe, 70% of mini excavators sold are below 3 tonnes. Likewise, compact wheel loaders are easy to operate and maneuver in small spaces. They can also be driven on public roads in some countries, subject to legislation, road homologation, and registration. Thus, with rising capital-intensive infrastructure projects, the demand for construction equipment is speculated to grow in the coming years.

Asia is projected to be the largest regional market.

Asia holds the largest share of the Construction Equipment market, which China dominates, followed by Japan and India. The growth of the Chinese market is mainly supported by stimulus spending provided by the government in 2020, which resulted in tremendous growth in the next two years. However, there was a sharp decline noticed in 2022 with a significant margin as the market started to fall to get normal to reach before 2020 sales. Due to this, the market is expected to remain downward in 2023. It will slowly recover in 2024, mainly due to the anticipated growing demand for compact equipment and the gradual increase in residential housing projects. Alternatively, demand for construction equipment in Japan is expected to grow because the government is heavily investing in reconstructing properties destroyed by natural disasters such as earthquakes and tsunamis.

Further, many of the population is also moving to cities in India, where urbanization is increasing, seeking better work opportunities and higher living standards. Due to this, the market grew in 2022 and is likely to remain upward in 2023 owing to several plans for infrastructure investment, which act as a driving force for the construction equipment industry. Developing nations such as Indonesia, Thailand, Malaysia, and others are pushing market growth due to increased public spending on housing and government expenditure on infrastructural developments.  

Key Market Players

The construction equipment market is dominated by players such as Caterpillar (US), Komatsu Ltd. (Japan), Hitachi Construction Machinery Co., Ltd. (Japan), Xuzhou Construction Machinery Group (China), and Deere & Company (US). These companies have strong distribution networks at the global level. These companies have adopted comprehensive expansion strategies and undertaken collaborations, partnerships, and mergers & acquisitions to gain traction in the growing market.

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Scope of the Report

Along with the given market data, MarketsandMarkets offers customizations in accordance with the company’s specific needs

The study segments the construction equipment  market :

By Equipment Type

• Articulated Dump Trucks
• Asphalt Finishers
• Backhoe Loaders
• Crawler Dozers
• Crawler Excavators
• Crawler Loaders
• Mini Excavators
• Motor Graders
• Motor Scrapers
• Rigid Dump Trucks
• Road Rollers
• Rough Terrain Lift Truck (RTLT) Masted
• Rough Terrain Lift Truck (RTLT) Telescopic
• Skid-Steer Loaders
• Wheeled Excavators
• Wheeled Loaders <80 HP
• Wheeled Loaders >80 HP
• Compactors
• Pick and Carry Cranes

By Equipment Category

• Earthmoving Equipment
• Material Handling Equipment
• Heavy Construction Equipment
• Other Equipment

By Propulsion Type

• Diesel
• CNG/LNG/RNG

By Power Output

• <100HP
• 101-200HP
• 201-400HP
•  >400 HP

By Engine Capacity

• <5L
• 5-10L
• >10L

By Application

• Commercial
• Residential
• Infrastructure

By Aftertreatment Device

• Diesel Oxidation Catalyst
• Diesel Particulate Filter
• Exhaust Gas RecirculationSelective Catalyst Reduction

By Rental Applicatio

• Commercial
• Residential
• Infrastructure

Electric & Hybrid Construction Equipment Market, By Equipment Type

• Electric Dump Trucks
• Electric Dozers
• Electric Loaders
• Electric Excavators
• Electric Motor Graders
• Electric Load Haul Dump

Electric Construction Equipment Market, By Battery Chemistry

• Lithium Iron Phosphate
• Lithium Nickel Manganese Cobalt
• Other Batteries

Compact Construction Equipment Market, Global Shipment by OEM

• Bobcat
• Caterpillar
• Hitachi Construction Equipment
• CNH Industrial
• Hyundai Construction Equipment Co., Ltd
• JCB
• Deere & Company
• Komatsu
• Kubota Corporation
• Liebherr
• Liugong Machinery Co., Ltd
• Terex Corporation
• AB Volvo
• Wacker Neuson SE
• Yanmar Holdings Co., Ltd
• Kobelco

By Region

• Asia
• North America
• Europe
• Middle East
• Rest of the World [RoW]

Recent Developments

• In June 2023, Caterpillar Inc. launched the new Cat 995 Wheel Loader, which increased to 19% more than the previous model. Also, it will deliver up to 13% lower hourly fuel consumption and offer an additional 8% efficiency gain.
• In June 2022, Komatsu Ltd. and Cummins Inc. collaborated on developing zero-emission haulage equipment. Building on the legacy of diesel engine partnership across various mining and construction equipment. This collaboration with Cummins Inc. helps the company to provide zero-emission solutions for its global customers.
• In March 2023, Deere & Company unveiled the new 85 P-Tier and 510 P-Tier current generation excavator models at CONEXPO-CON/AGG 2023 in Las Vegas, US.
• In June 2022, Deere & Company and Wacker Neuson collaborated on developing < 5 metric tons of excavators designed and manufactured by Wacker Neuson. Also, Deere & Company will develop and manufacture 5-9-metric-ton excavators, incorporating designs from Wacker Neuson. Per the agreement, distribution, parts, service, and support will continue through the Deere & Company dealer network.
• In May 2023, Hitachi Construction Machinery invested in and formed a commercial partnership with aptpod, Inc. In the future, Hitachi Construction machines will use the high-speed IoT platform offered by Autopod to co-create real-time "digital twins*1" for construction sites and will design systems for remote control and autonomous operation of construction machines using the digital twins

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