Heavy Construction Equipment Market by Type (Earth Moving, Material Handling, and Heavy Construction Vehicles), End-use Industry (Construction, Mining, and Oil & Gas), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Heavy Construction Equipment Market Analysis

The global heavy construction equipment market size was $176.8 billion in 2020 and is predicted to grow with a CAGR of 4.8%, by generating a revenue of $257.2 billion by 2028.

Market Synopsis

Heavy construction equipment market is gaining huge popularity owing to increase in demand for housing due to rapid urbanization, industrialization, and population growth. In addition, construction projects such as development of smart cities, rail & road construction, bridges, and other mining activities are driving the heavy construction equipment market size. This is because in these construction projects, timely completion of work as well as quality of work matter. The heavy equipment such as backhoe excavator ensures optimum use of materials and manpower. Ageing infrastructure that requires repair, maintenance, or replacement is another factor driving the market growth.

However, these construction equipment have made the workers work monotonous and it requires only skilled labors to handle such big equipment. This factor is estimated to restrain the heavy construction equipment market share during the forecast period.

The role of heavy construction equipment in reducing the cost of construction projects by increasing the rate of output and timely project completion especially for large contracts is estimated to generate huge growth opportunities. In addition, renting heavy construction equipment has become quite popular as it is economical to buy such heavy construction equipment on rent. These equipment play an important role in maintaining the production rate where there is a shortage of skilled labors.

According to regional analysis, the Asia-Pacific heavy construction equipment market accounted for $64.7 billion in 2020 and is predicted to grow with a CAGR of 5.6% in the projected timeframe.

Heavy Construction Equipment Market Overview

Heavy construction equipment also include heavy duty vehicles, heavy machines, and construction equipment. Heavy vehicles are essential for construction projects of any size right from construction of residential & commercial buildings to large civil projects. Some of the popular examples of these equipment include excavators, dump trucks, bulldozers, motor graders, and others. These equipment are designed for performing various tasks such as earthworks, open-pit mining, material handling, construction, demolition, and others. The heavy construction equipment can be classified into earth moving equipment, hoisting equipment, earth-compacting equipment, hauling equipment, and conveying equipment.

Covid-19 Impact on Heavy Construction Equipment Market

The global crisis caused by COVID-19 pandemic had a devastating impact on several industries owing to nation-wide lockdown imposed across various countries and social distancing norms. Similarly, the construction equipment industry was negatively impacted by the pandemic as the heavy equipment manufacturers had to temporarily shut down their operations owing to drastic decline in demand, shortage of labors, and raw materials. Also, decline in government investments in construction & infrastructure projects due to onset of pandemic has affected the heavy construction equipment market growth. As construction is a volatile industry, reduced economic activity due to low demand for commercial, industrial facilities, refurbishment, or residential construction has affected the heavy construction equipment market share during the pandemic. In addition, the migrant and local workers working in the construction sites were unable to reach their work locations due to on-site COVID-19 protocols that have affected the productivity and building materials supply chain.

Many heavy construction equipment manufacturers have shifted their focus towards manufacturing of essential medical supplies to battle coronavirus. These manufacturers have shifted their focus towards development of ventilators, masks, face shields, and other essentials. For instance, on May 13, 2020, the Association of Equipment Manufacturers (AEM), the U.S.-based trade association company, partnered with The Marek Group, the U.S.-based large field sales network group, to supply the COVID-19 essentials such as personal protective equipment (PPE) and face shields. In addition, four excavators from Shandong Lingong Construction Machinery Co., Ltd., the well-known construction equipment manufacturer, were used to construct two hospitals in Wuhan, China which was the epicenter of COVID-19 virus.  

Rapid Urbanization and Industrialization to Drive the Market Growth

Rapid urbanization and industrialization especially in the developing countries lead to economic growth, create employment opportunities, and help in the development of nation. It also creates socio-economic and environmental changes by constructing energy-efficient buildings for sustainable future. For instance, urbanization in India is led by 100 Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation, Clean India Mission, National urban information system, Sardar Patel National Urban Housing Mission, National Heritage City Development and Augmentation Yojana. The use of heavy construction equipment plays a vital role in urbanization and industrialization as it uses advanced engineering technology for cooling the engine and fuel injection that drives the efficiency of that equipment. Other major factors for selecting heavy construction equipment are high digging strength, dump heights, dump depths, engine horse power, ground clearance, and other factors.   

To know more about global heavy construction equipment market drivers, get in touch with our analysts here.

Requirement of Skilled Labor and High Heavy Construction Equipment Cost to Restrain Market Growth

Skilled labors are required for successful operations of heavy construction equipment machines. Also, purchasing brand new equipment involves high cost. In addition, training the workers on new equipment adds to the cost that the company as the company has to invest on machines and workers. These factors are estimated to restrain the heavy construction equipment market size during the forecast period.  

Equipment Rentals Option to Generate Excellent Opportunities

Equipment rental has become an attractive option for the individual businesses and the heavy construction equipment manufacturers to meet the growing demand for heavy equipment from the construction industry. Renting construction equipment offers various advantages as the equipment is well maintained & reliable, no capital investment is required, and there is zero service & maintenance cost. Also, the companies get an opportunity to try and experience new heavy construction equipment models before making a purchase decision. The power and precision of technologically advanced machinery can be experienced by the manufacturers along with cost saving. These equipment are maintenance free as they go through regular maintenance checks and rental companies include the maintenance in their contract. Various heavy construction equipment that can be rented include backhoe loaders, excavators, bulldozers, multi-terrain loaders, motor grader, track loaders, skid steer loaders, wheel loaders, wheel excavators, and others.  

To know more about global heavy construction equipment market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The earth moving sub-type is anticipated to have a dominant market share and generate a revenue of $138.6 billion by 2028, growing from $92.5 billion in 2020. This growth is majorly owing to the use of heavy construction equipment of heavy-duty vehicles in mining and construction activities where they are used to move or relocate heavy rocks, materials, mud, and debris. Various earth moving equipment used in construction & mining activities include excavators, backhoe loader, trencher, motor grader, bulldozer, telehandler, dump truck, and others. For instance, excavator comprises of a hydraulic system that generates hydraulic force to control the mechanical arm of the machine for excavating or moving large objects.    

Source: Research Dive Analysis

The construction sub-segment is anticipated to have a dominant market share and generate a revenue of $128.6 billion by 2028, growing from $84.9 billion in 2020. This is majorly owing to large number of on-going construction projects across the world. For instance, as stated on January 10, 2021, in Latham Australia, the popular manufacturer & supplier of material handling & power transmission equipment, stated that construction industry across the world is evolving at a fast pace with the rapid infrastructure and construction projects. Istanbul New Airport is a $5.6 billion ongoing construction project which is an expanding hub for international transit. Already 80 million passengers move through city’s two airport terminals every year. Once the new airport is complete, it is estimated to accommodate 150 million passengers each year across three terminals.  

Source: Research Dive Analysis

The Market for Heavy Construction Equipment in Asia-Pacific to be the Most Dominant and Fastest Growing

The Asia-Pacific heavy construction equipment market accounted $64.7 billion in 2020 and is projected to grow with a CAGR of 5.6%. Asia-Pacific heavy construction equipment market is driven by economic development of countries such as India, China, and Japan along with significant government investment in the construction sector. For instance, as stated on July 09, 2021, in the Construction Global, the leading construction news provider platform, some of the top, on-going construction projects in this region include Linear Chuo Shinkansen, the high-speed rail network of Japan. This project is estimated to be completed by 2027 and it will transport passengers from Tokyo to Nagoya, having a distance of 286 kilometers in just 40 minutes. Similarly, the Beijing International Airport, China is estimated to complete its further expansion by 2025 which will surpass Dubai’s Al Maktoum International Airport in terms of passenger capacity, airport space, plane capacity, and cost. Such large construction projects are estimated to drive the Asia-Pacific heavy construction equipment market size during the forecast period.    

Competitive Scenario in the Global Heavy Construction Equipment Market

Acquisition and product advancement are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading heavy construction equipment market players are Caterpillar Inc., Komatsu Ltd., John Deere, XCMG Group, SANY Group, Volvo Construction Equipment, Hitachi Construction Machinery Co., Ltd., Leibherr, Hyundai Doosan Infracore, and JCB.

Porter’s Five Forces Analysis for the Global Heavy Construction Equipment Market:

• Bargaining Power of Suppliers: All the companies operating in construction machinery market buy various raw material in the form of machine components from suppliers. Hence, the supplier is in the dominant position in the industrial goods sector and can use their negotiating power to extract higher prices from the manufacturers.  
  Thus, the bargaining power of suppliers is high.
• Bargaining Power of Buyers: The buyers in the construction equipment industry want to buy the best and technologically advanced equipment at low price which puts pressure on the manufacturers and reduces their profitability. 
  Thus, buyer’s bargaining power will be high.
• Threat of New Entrants: The new players entering in the heavy construction equipment market have to invest huge capital along with the launch of innovative and technologically advanced products. Hence, new players are less likely to enter into such dynamic industry where established players such as Caterpillar Inc. and Komatsu are already at the dominant position. 
  Thus, the threat of the new entrants is low.
• Threat of Substitutes: At present there are no alternative products for heavy construction equipment. 
  Thus, the threat of substitutes is low.
• Competitive Rivalry in the Market: The companies operating in this market are focusing on advanced product development to boost their consumer base and to increase their sales & profitability. 
  Therefore, competitive rivalry in the market is high.