The Heavy Construction Equipment Market Projected to grow at a CAGR of 4.8% and generate a Revenue of $257.2 billion by 2028 - Research Dive

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The global heavy construction equipment market size is predicted to be valued at $257.2 billion by 2028, surging from $176.8 billion in 2020, at a noteworthy CAGR of 4.8%.

Covid-19 Impact on Heavy Construction Equipment Market

The coronavirus outbreak has caused significant impact on the construction sector affecting the economic growth. The construction projects across various countries were down due to cancellation or postponements. This is majorly owing to lockdown imposed across various countries that have brought operational restrictions and supply chain disruptions. Many construction companies have faced financial crisis owing to reduced investment in the construction sector and drastic decline in demand for construction equipment. Construction industry is volatile and decline in demand from commercial, industrial facilities, buildings, infrastructure, and refurbishment have greatly affected the demand. Also, construction industry has faced shortage of labors during COVID-19 pandemic owing to travel restrictions and fear of contracting the virus. In addition, the new on-site protocols such as social distancing norms and use of personal protective equipment (PPE) have reduced productivity. All these factors have negatively impacted the heavy construction equipment market size during the pandemic.     

Various initiatives implemented by heavy construction equipment manufacturers such as shifting their manufacturing focus towards the production of personal protective equipment (PPE) such as gloves, face masks, face shields, and others are helping the society to recover from the chaotic situation. For instance, in May 2020, Yanmar Tractor, the leading tractor brand, partnered with John Deere, the leading construction equipment manufacturer, to equip Solis 90 CV tractor to spray disinfectant throughout the City of Indaiatuba, Brazil to prevent the spread of COVID-19 virus.

Global Heavy Construction Equipment Market Analysis

Heavy construction equipment market is gaining huge demand from construction sector owing to technological integration and increase in prefabrication & modular construction projects. For instance, the use of 3D printing and drones’ technology have made the construction work safer and efficient. This is majorly owing to the use of drones to ensure that all the construction materials are placed at exact location and 3D printing to ensure that every material is perfect in size. In addition, mobile and cloud applications have made construction work easier. For instance, the use of building information modeling (BIM) facilitates resource management as it helps people to stay in touch and collaborate with each other throughout the project. In addition, prefabricated homes and modular buildings have gained huge popularity recently. This is because they offer energy efficiency and cost effectiveness due to ease of design and quick construction time. All these factors are anticipated to drive the heavy construction equipment market share during the forecast period.  

However, high cost of heavy construction equipment along with high upfront installment is estimated to restrain the market growth. Skilled labors are required to operate the heavy construction equipment due to which the company has to invest significant amount and time in training the workers on new machinery.

The latest heavy construction industry market trends such as construction robotics, advanced building materials, green building, construction monitoring, and others are estimated to generate huge demand for heavy construction equipment during the forecast period. Construction is the labor-intensive industry that involves time-consuming and repetitive tasks. Hence, the use of construction robotics and automation in heavy equipment can increase productivity as these collaborative robots can automate excavation, concrete works, demolition, load lifting, and transportation tasks. In addition, to boost the productivity, uptime, and efficiency the latest heavy construction equipment is equipped with telematics, payload weighing, grade control, and unmanned aerial vehicles (UAVs) or drones. For instance, the use of telematics provides machine diagnostics that avoids downtime, misuse, and theft. Also, it can be used to generate reports related to fuel consumption, machine operation, and others.  

Global Heavy Construction Equipment Market, Segmentation

The global heavy construction equipment market is segmented based on type, end-use, and region.

Type:

The type segment is further classified into earth moving, material handling, and heavy construction vehicles. Among these, the earth moving sub-segment is anticipated to have a dominant market share and shall surpass $138.6 billion by 2028, with an increase from $92.5 billion in 2020. This is majorly owing to the use of earth moving equipment for complex & heavy construction activities that allows the contractors to complete their work with minimal quality defects and protects them from the claims related to poor workmanship. In addition, such heavy equipment such as backhoe excavator, crawler loader, and others overcome the limitations associated with manual labor such as socio-economic conditions, poor workmanship, and others.

End-use Industry:

The end-use industry segment is further classified into construction, mining, and oil & gas. Among these, the construction sub-segment is anticipated to have a dominant market share and shall surpass $128.6 billion by 2028, with an increase from $84.9 billion in 2020. The continuous urbanization, population growth, and large infrastructure projects are the largest contributor to drive the growth of construction sub-segment. Various heavy equipment such as trenchers, loaders, excavators, graders, backhoe, and others are used in the construction activities. For instance, excavators are widely used for heavy lifting, demolition, cutting of trees, and others. Backhoe is used for loading, unloading, and lifting the materials. Similarly, bulldozers are used for removing top layer of the soil up to a particular depth.  

Region:

The heavy construction equipment market for the Asia-Pacific region is projected to witness rapid growth. This region’s market generated a revenue of $64.7 billion in 2020 and is projected to reach up to $100.0 billion by 2028. This is majorly owing to various initiatives taken by the developing countries such as China and India to boost the economic growth & provide employment to large number of people via urbanization and industrialization. For instance, the construction industry in India is the third largest contributor to the economic growth that employs more than 40 million people and has large number of low-cost workers. In addition, the different flagship programs launched by the Indian government such as ‘Smart Cities Mission’, ‘Housing for All’, Atal Mission for Urban Rejuvenation and Transformation’ (AMRUT), and others are estimated to boost the heavy construction equipment market demand. 

Top 10 Major Key Players in the Global Heavy Construction Equipment Market are -

1. Caterpillar 
2. Komatsu Ltd
3. John Deere 
4. XCMG Group
5. SANY Group 
6. Volvo Construction Equipment
7. Hitachi Construction Machinery Co.Ltd
8. Leibherr
9. Hyundai Doosan Infracore
10. JCB

Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.

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

• Bargaining Power of Suppliers: The heavy equipment manufacturers are dependent on various suppliers for purchasing the raw materials and machine components. Hence, suppliers can use their bargaining potential to grab high profits from the heavy equipment manufacturers.  
  Thus, the bargaining power of suppliers is high.
• Bargaining Power of Buyers: Construction industry is volatile, and buyers demand technologically advanced equipment at low price. Also, they are eligible for various subsidies and tax benefits. They can use their bargaining power to buy the equipment at low price.  
  Thus, buyer’s bargaining power will be high.
• Threat of New Entrants: The threat of new entrants is low as the emerging players have to invest huge capital to manufacture construction equipment. In addition, the presence of established players affects the entry of new players in this market.  
  Thus, the threat of the new entrants is low.
• Threat of Substitutes: At present there is no substitute products for heavy construction equipment that can be used in large construction and mining projects.    
  Thus, the threat of substitutes is low.
• Competitive Rivalry in the Market: The heavy construction equipment market players are focusing on advanced product development, business expansion, and acquisition to attract the new customers and retain the existing customers. 
  Therefore, competitive rivalry in the market is high.