Heavy Construction Equipment Market

Heavy Construction Equipment Market

The global heavy construction equipment market was valued at USD 190.3 billion in 2022 and is projected to reach USD 252.4 billion by 2028, growing at 4.8% cagr during the forecast period. Over the world, the heavy construction equipment market is expanding significantly, and during the forecast period, a similar trend is anticipated. The demand for heavy construction equipment has been driven by several factors, including the increasing investments in construction & infrastructure sectors. The major end-use segments of heavy construction equipment include mining, infrastructure, building &construction, forestry & agriculture, and others.

Mining is the principal economic activity that involves extracting minerals and rare earth minerals from the earth. Rising demands for minerals and rare earth minerals has driven the industry growth, which has played an essential part in encouraging mining equipment companies to offer technologically advanced equipment that enables in performing better mining operations such as drilling, crushing, and demolition.. Crawler excavators, crawler dozers, motor graders, articulated dump trucks, rigid dump trucks, wheeled loaders, and mining trucks are among the mining equipment employed.. Asia Pacific is estimated to be the largest mining heavy construction equipment market. This large share can be attributed to China, which is home to major mining equipment manufacturers such as Sany Heavy Industry and XCMG Group. Being a mineral richmineral-rich country, it uses crawler excavators and rigid dump trucks on a large scale, specifically for domestic mining applications

Infrastructure applications include several segments and are not limited to the construction of dams, bridges, railways, aqueducts, railways, road networks, and ports. The majority of these projects are government-funded and may take years to build, and the companies may remain engaged in providing services for years. Infrastructural activities are projected to grow as they are critical in improving connectivity and promoting sustainable growth. Rental construction equipment are is widely used in infrastructure projects due to the long durationduration of projects and the focus of engaged companies to limit capital expenditure.

Attractive Opportunities in Heavy Construction Equipment Market Trends

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Heavy Construction Equipment Market Dynamics

Driver: Rapid Urbanization

The increasing demand for heavy construction equipment is largely driven by the increasing population. The global scenario of people migrating from rural to urban areas has raised this growth rate even further. In 2018, 55% of the world’s population liveds in urban areas, a proportion that is expected to increase to 68% by 2050. Projections show that urbanization, the gradual shift in residence of the human population from rural to urban areas, combined with the overall growth of the world’s global population could add another 2.5 billion people to urban areas by 2050, with close to 90% of this increase taking place in Asia and Africa, according to a new United Nations data set.

In recent years, the Asia Pacific region, which primarily includes emerging markets such as India and China, has progressed tremendously significantly in the heavy construction industry. Together, India, China and Nigeria will are expected to account for 35% of the projected growth of the world’s urban population between 2018 and 2050. By 2050, it is projected that India will have added 416 million urban dwellers, China 255 million, and Nigeria 189 million.

Improvement in living standards of people around the world has also fueled demand for improved hygiene and sanitation requirements, leading to the increased use of heavy construction equipment for public work projects.

Restraint: Socio-Economic effects of heavy construction activities

Socio-economic implications such as relocation/resettlement of host communities is a major issue faced by companies in the construction and mining industries. In India, as per The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relocation/resettlement of host communities is required to vacate the required land so that government agencies can acquire it for construction/mining purposes. This involves price negotiations for acquiring suitable alternative land for the resettlement of these host communities. Since the public at large disapproves of such construction and mining projects, it acts as a restraining factor for market growth.

Opportunity: renting or leasing of equipment

Renting or leasing heavy construction equipment is considered beneficial to construction contract companies, as it fulfills the client’s requirement for the equipment without paying the full price. One of the merits of renting/leasing is that it may be tailored to the required specification, specific equipment requirements, and income expectations. Renting or leasing heavy construction equipment is determined by criteria such as the asset's duration of use, improvements in technology during the amount of time it will be utilized, and the tax benefits associated with leasing/renting of equipment. Because of these variables, contractors prefer to rent rather than buy equipment, unless it can be used for more than 75 percent of the year. Businesses may also access more and diverse types of equipment while leveraging the greatest technologies available by leasing. As a result, this provides an option for heavy construction equipment market participants to use the machinery without incurring purchase expenditures.

Challenge: High cost of equipment

One of the biggest challenges faced by the heavy construction equipment industry is its high capital requirement. Service providers of heavy construction equipment have to invest huge amounts for the purchase and to maintainmaintenance of the equipment. For such industries, it is crucial for their survival and growth that a proper balance be maintained between the requirement of the equipment requirement and its ability to generate profits or obtain financing. This requirement for huge investments requirement also creates entry barriers to the market, which constrains the volume demand for the equipment, causing leading to low scope for price reductions, owing to low economies of scale.

Material handling equipment type of heavy construction equipment products to be the fastest growing market by 2028, in terms of value.

Material-handling equipment are is mechanical equipment used for the movement, storage, control, and protection of materials, goods, and products in the process of manufacturing, distribution, consumption, and disposal. Material-handling equipment is classified into four major categories – transport equipment, positioning equipment, unit load formation equipment, and storage equipment. It includes equipment such as cranes, conveyors and forklifts.

Electric type of heavy construction equipment products to be the fastest growing market by 2028, in terms of value.

The current battery technology is not developed enough to operate the standard and large large-capacity off-highway vehicles. Hence, due to the limited battery capacity, the electrification in construction equipment is limited to mini versions of construction vehicles like such as mini excavators and compact/skid loaders. Few companies offer cable-connected off-highway vehicles, where charging limitations are reduced. Thus, construction equipment that requires more power to operate uses hybrid-electric technology. Some of the major hybrid-electric construction equipment include dozers and mine dump trucks. Asia Pacific is expected to be the largest market for electric heavy construction equipment during the forecast period, owing to the development of heavy construction projects. With the growing electrification and the presence of many leading equipment manufacturers, the North American electric heavy equipment market is predicted to grow withrecord a the highest CAGR of 5.7% during between 2023 and 2028.

5-10 L type of heavy construction equipment products to be the fastest growing market by 2028, in terms of value.

Construction equipment with engine capacity ranging between 5-10L are is primarily used for ground leveling construction, roads, railways, dams, and urban infrastructure. An increase in investment in commercial projects is one of the major factors driving the demand for engines with 5-10L capacity. Construction equipment like such as crawler excavators, compactors, and road rollers, and others are found under this engine capacity category.  Heavy construction equipment with 5-10L engine capacity is used in rough terrain, increasing the operating cost and fuel consumption. The demand for construction equipment with 5-10L engine capacity in Asia is expected to remain high as heavy equipment are is used in huge commercial and infrastructure projects.

<100 HP type of heavy construction equipment products to be the second fastest growing market by 2028, in terms of value.

Heavy construction equipment with less than 100 HP is easy to maneuver and performs tasks in limited space, especially for highway repair and maintenance projects. The compact heavy construction equipment with a power output of less than 100 HP is particularly used in urban areas where space is limited. Some low-power heavy construction equipment includes mini excavators, compactors, and loaders. The trend for less than 100 HP construction equipment like the mini excavator would grow due to their ability to work in intricate and remote places. Thus, this trend would create a growth opportunity for the <100 HP power segment during the forecast period.

Heavy lifting application segment to be the second largest segment in the heavy construction equipment market, in terms of value.

Heavy lifting operation is a process for the lowering and lifting of load. Lifting operations are inherent in the construction industry and. They are used during the transportation of material from the storage place to the place where it is to be processed, and during the processing of materials. Heavy lifting equipment is used for constructing large frameworks and tall buildings. As the name suggests, heavy lifting equipment is specially designed to lift weight of several tons. Cranes and telescopic handlers are the most commonly used heavy lifting equipment in the construction industry.

Infrastructure end-use industry segment to be the fastest growing segment in the heavy construction equipment market, in terms of value.

Infrastructure applications include several segments and are not limited to the construction of dams, bridges, railways, aqueducts, railways, road networks, and ports. The majority of these projects are government-funded and may take years to build, and the companies may remain engaged in providing services for years. In addition, the expansion of government infrastructure development projects and public–private partnerships for the construction ofto construct public infrastructure systems in countries such as the US, India, and China, has aided market growth. The US government has made significant investments in the construction ofconstructing roads, railway tracks, and other infrastructure, which necessitates the employment of excavators, loaders, and other heavy equipment. For instance, in March 2021, the US President introduced a USD- 2 trillion infrastructure plan, which includes transportation, broadband, electric grid, and residential & commercial constructions.

Asia Pacific to be the fastest growing market in the heavy construction equipment market.

Asia Pacific accounted for the largest market share of at 36.8% in of the global heavy construction equipment market, in terms of volume, and is projected to lead during the forecast period owing to the largest existing wind energy capacity installations in China, Japan, India, and Australia. The heavy construction equipment market has experienced growth in terms of the number of projects such as dams, airports, and hydroelectric projects, due to which many international companies have started their manufacturing plants in this region. Some remarkable construction projects, such as the Beijing New International Airport (China) and the South to North Water Transfer Project (China), are set up in the region. The region is estimated to be the most populated in the world, which creates opportunities for the growth of the heavy construction equipment market.

Some major projects driving the region's heavy construction equipment market are the Songdo International Business District in South Korea and the China-–Pakistan Economic Corridor. These mega projects have led to increased investments and construction activities, thereby driving the heavy construction equipment market.

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Heavy Construction Equipment Market Players

The heavy construction equipment market is dominated by a few globally established players such as Caterpillar (US), Liebherr AG (Germany), Terex Corporation (US), Volvo Group (Sweden), Komatsu (Japan), Hitachi Construction Machinery Co., Ltd. (Japan), SANY Heavy Industry Co., Ltd. (China), HD Hyundai (South Korea), XCMG Group (China), CNH Industrial N.V. (UK), and J C Bamford Excavators Ltd (UK), among others, are the key manufacturers that secured major contracts in the last few years.

These companies are pursuing a variety of inorganic and organic strategies in order to gain a foothold in the heavy construction equipment market. The research includes a detailed competitive analysis of these key players in the heavy construction equipment market, including company profiles, recent developments, and key market strategies.

Heavy Construction Equipment Market Report Scope

The study categorizes the heavy construction equipment market based on Machinery Type, Application, Propulsion Type, Power Output, Engine Capacity, End-use Industry, and Region.

Heavy Construction Equipment Market by Machinery Type:

• Earthmoving Equipment
• Material Handling Equipment
• Heavy Construction Vehicles
• Others

Heavy Construction Equipment Market by Application:

• Excavation & Demolition
• Heavy Lifting
• Material Handling
• Tunneling
• Transportation
• Recycling & Waste Management

Heavy Construction Equipment Market by Propulsion Type:

• Disel
• CNG/LNG/RNG
• Electric

Heavy Construction Equipment Market by Power Output:

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

Heavy Construction Equipment Market by Engine Capacity:

• <5L
• 5-10 L
• >10 L

Heavy Construction Equipment Market by End-use Industry:

• Building & Construction
• Forestry & Agriculture
• Infrastructure
• Mining
• Others

Recent Developments

• In August 2023, Hack Schwerlastservice GmbH has taken delivery of a new LTM 1110-5.1 mobile crane. With the Liebherr 110-tonne crane, the Neuwied-based company is expanding its fleet.
• In July 2023, HD Hyundai Infracore signed an MOU on ‘Mutual Partnership with Korean East-West Power to develop Hydrogen Internal Combustion Engines (H2ICE) and target the clean energy generation market.
• In July 2023, Komatsu announced a national cooperative contract for construction equipment with related attachments and technology awarded through Sourcewell.
• Sourcewell is a service cooperative with membership exceeding 60,000 government, education and nonprofit entities throughout North America.
• In May 2023, Sany signed a strategic cooperation agreement with Guangxi Shenglong Metallurgical Co Ltd to drive green transformation in the steel industry.
• The event also marked the completion of a USD 12 million procurement deal that saw Sany deliver thirty-five EV550 electric tractors, fifty electric dump trucks, and a battery swapping station to Shenglong Metallurgical.

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