Analysis and Forecast
Heavy equipment has become an essential part of the construction industry. Factors such as the rapid population growth and geographical expansion add to its growing momentum in the industry. Without heavy equipment, keeping up with the needs of rapid urbanization is next to impossible. Heavy machinery not only saves time and labor costs but also serves multiple purposes at a jobsite.
Major contributors in the heavy equipment market include the following:
- Volvo Construction Equipment
- Hitachi Construction Machinery Co., Ltd.
- Caterpillar Inc.
- C. Bam ford Excavators Limited (JCB)
- Doosan Heavy Industries & Construction
- Komatsu Ltd.
The global infrastructure development is directly involved in the increasing worldwide heavy equipment demand and will surely enhance the growth of the heavy equipment market in the construction industry.
The focus of most heavy equipment companies in the industry seems to be on innovation and new product development. The addition of advanced technology in the existing equipment market is an ongoing trend. More and more contractors are adapting to these technologically advanced equipment. The fact that heavy machinery is as costly as it is, contractors end up rehabilitating or retrofitting the existing machinery instead of replacing it.
The interest in heavy construction equipment is fanned by the increasing investment in construction activities.
The excavation and demolition industry is assessed to rule the equipment development or construction market and is projected to be the quickest developing portion during the initial period.
One of the main issues that industrial equipment suppliers face is region-specific government regulations. These regulations put limitations on people working in the construction industry and supplying equipment around the world.
By 2025, the global heavy equipment industry is expected to reach 90.4 billion dollars with a CAGR of 5.4% according to the Grand View Research report. The major contributor to this growth is the increase of investment in the construction industry.
The worldwide increase in infrastructure development is the main catalyst for market growth in the forecast period. Infrastructure development leads to increased construction activities, which ultimately lead to a demand for high-performance construction machines.
Impact of Covid-19
While the aforementioned statistics predicted still remain a possibility, the construction industry, just like every other industry, is likely to be impacted by the COVID-19 pandemic.
The reports post-COVID-19 predicts the markets will fluctuate during the forecast period. According to these reports, in the next five years, the heavy equipment industry will register a 1.4% CAGR in terms of revenue and the market value will reach $98600 million by 2025, up from $93380 million in 2019.
The reports that came prior to COVID-19 suggested a higher CAGR %; the drop in later reports is a direct result of the Impact of COVID-19 on global economy. Ironically, one of the major contributors to the growth was the increasing demand for building airports around the world. The global need for building new airport infrastructure was expected to raise the global need for heavy construction equipment and have a notable impact on heavy equipment market percentage.
However despite the difficult year we’ve had the global construction market is expected to regain its growth and recover from the pandemic in the upcoming years.