Building the Future: Exploring the Booming Construction Equipment Industry

Understanding the Dynamics of the Construction Equipment Market: Demand, Challenges, and Growth Opportunities

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Construction equipment is machinery specifically designed to carry out construction tasks. This equipment is employed for a variety of tasks including drilling, hauling, excavation, paving, and grading. The applications of construction equipment cover several industries, including manufacturing, oil & gas, and building & infrastructure.

Understanding the Dynamics of the Construction Equipment Market

The demand for construction equipment is predicted to increase with the increase in construction activities around the world. Lower housing costs that promoted consumers to buy new homes and supportive government programs such as stimulus packages are two key elements that are expected to boost market expansion during the projection period. The expansion of the construction equipment market, however, is anticipated to be constrained over the next few years by supply chain and inventory problems, as well as a lack of semiconductors. Construction activity in 2020 was negatively impacted by the COVID-19 pandemic. Due to the sudden lockdown that resulted from the COVID-19 viruses’ rapid spread, construction activity abruptly decreased. The OEMs saw supply chain issues and temporary dealer store closures that prevented new purchases.

The need for construction equipment, however, dramatically increased in 2021 as a result of the initiation of construction activity on new projects. Reduced housing costs helped to increase demand for residential areas, which in turn increased demand for construction equipment.

Will the Cranes Soar to New Heights of Popularity?

The market for cranes and construction equipment is anticipated to soon be driven by significant development projects around the world. There are numerous construction projects planned for Europe. The construction projects in the region led to the highest growth rates in Germany, France, and Italy. The port expansion, an underwater tunnel connecting significant European nations, and railway tunnels, which make use of a variety of crane types and drive the global crane market, are among the projects.

For instance, Rothmund GmbH Kran und Montage acquired its second LTM 1230-5.1 from Liebherr in March 2021, six months after purchasing the first one. The new LTM 1230-5.1 was also delivered to Schussmann Kranservice GmbH in the same month. From 2021, Africa and Latin America are anticipated to become strong markets that will boost the economy and stimulate more foreign investment in infrastructure and building projects.

The number of cranes in North America increased. In North America, the residential sector employs about 40% of the overall crane count. With 70 cranes devoted to high-rise cooperative projects, Toronto is the market leader. The second-largest market for cranes in North America, mixed-use development accounts for roughly 25% of all cranes.

The rise in net crane count shows that the construction industry is thriving and stable. As more cities in North America continue to add to their list of proposed developments, this expansion will continue.

Is the Growth in Infrastructure Developments Set to Skyrocket Sales of Construction Equipment?

The resumption of halted construction projects and anticipated new investments in the construction sector as part of the infrastructure development activities have led to a slow but steady increase in the market for construction equipment after the Covid-19 period. Investments in infrastructure, as well as residential and commercial infrastructure, are some variables that affect the growth of construction equipment manufacturers. and a rise in institutional capital spending internationally. Construction activity has increased in several countries in the US, the UK, China, and India.

The US infrastructure, for instance, has received considerable attention. As part of the infrastructure investment package, the US government announced in November 2021 an almost USD 1 trillion plan with 4,300 projects already underway and more than USD 110 billion in funding. The demand for construction equipment would therefore be driven by such anticipated investments and expanding construction activity for infrastructure development during the forecast period.

Could Construction Equipment Rental Services be the Game-Changer Trend in the Industry?

These days, the global industry is witnessing an increase in demand for rental services. According to the Construction Equipment Rental Association (CERA), demand for rental services is anticipated to increase over the predicted period in developing and most populous economies such as China and India. The new regional and local businesses are anticipated to make their mark on the rental service industry and generate significant earnings from their local customers. To increase their earnings, large construction companies focus mostly on various industries including general infrastructure, oil and gas, utility and electrical, as well as commercial and residential construction.

In addition, as governmental projects indicate a larger preference for the rental use of equipment, the expansion of the construction equipment rental industry would be gradually steady as infrastructure programs in developing countries received better budgetary allocations. Also, working with rental businesses is safer, more convenient, and more cost-effective for governments than owning their fleet of construction equipment.

Key Market Leaders are Opting for Next-Generation Construction Equipment to Expand their Product Portfolio

Market leaders with up to 40% of the market share, including Caterpillar Inc., JCB, Komatsu, AB Volvo, and Liebherr, dominate the global market. The massive global customer bases of these businesses and the rising trend in product development spending both contribute to their dominance. As a result of its extensive customer base and decades-long strong market presence, Caterpillar Inc. holds the largest share of the global market.

In addition, the businesses are involved in converting old equipment into newer models that are familiar with cutting-edge technologies such as connected loT, automation, etc. Some businesses are also extending their services beyond their typical setup in order to offer digital solutions that add value to customers throughout the lifecycle of their products.

For instance, Caterpillar Inc. introduced the Next Generation D6 dozer in November 2018; it is 35 percent more fuel efficient and has greater agility than earlier versions. The business is also consistently creating innovative new products that aim to increase customer loyalty and contribute to its lucrative growth.

Will the Advent of Autonomous Construction Equipment Pave the Way for Lucrative Growth Opportunities?

A number of technological advancements are being made in the construction equipment industry to produce products that are more reliable and optimal. As productivity can be increased with minimum effort and fewer errors, the need for automated solutions is on the rise. In the market for off-highway operating vehicles, autonomous operating technology is progressively gaining traction. Being repetitive, physically demanding, precise, and time-sensitive, construction activity is well suited for autonomous machines. The need for autonomous construction equipment is being driven by this.

Manufacturers are developing autonomous construction equipment that communicates wirelessly by interfering with other machinery’s radio transmissions, taking directions, and reporting its status. It guarantees enhanced production, decreased unscheduled maintenance, and higher safety. As a result, the market for construction equipment would have a chance to expand and thrive during the projection period due to the trend toward autonomous construction equipment.

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