If facts are to be believed then the global heavy construction equipment market is estimated to reach USD 166.05 billion by 2020, with a projected CAGR of 6.80 per cent, signifying a steady increase in the demand for heavy construction equipment. Spurring this growth is primarily the increased investments in infrastructure sector including residential and commercial building construction segment worldwide.

Decoding The Global Trends

Demand within the global building construction equipment manufacturing industry is anything but homogeneous with certain countries and sales regions significantly outperforming others. We look at these global market trends and what is in store for building construction equipment manufacturers in India:

  • The Asia-Pacific market including India is expected to account for much of the growth in the global heavy construction equipment sector as construction activities will continue to increase in these regions. The Asia-Pacific construction equipment market is supposed to grow at a CAGR of 10.2 percent during 2015 to 2020.
  • The Asia-Pacific region, with China at the forefront is expected to be the key region for aggregate demand due to its huge government-led investment in new transport and other vital infrastructure. In fact, this region’s share of overall global aggregates demand is believed to grow substantially over the next two years. Such a big demand for aggregates will definitely go hand in hand with big demand for building construction equipment.
  • The demand for construction equipment is set to rise in Malaysia, Singapore and other Asian countries as well.
  • Growth in North American market is expected to remain moderate in times to come.
  • After experiencing construction equipment oversupply issues from 2007-2012 in some of the Africa/Middle East region’s wealthier nations, the market here is expected to advance at a faster pace in the five years.
  • Despite the rollercoaster ride of the construction equipment sector in Europe, the demand is expected to increase in future in the region.
  • For US, the outlook for the construction equipment industry coupled with positive mortgage industry measures looks positive due to the revival in residential as well as non-residential construction measure.
  • An expanding economy coupled with increased government spending on infrastructure is forecasted to help the Chinese construction industry to achieve a CAGR of 9.72 per cent over the period of 2014-2018.
  • It is estimated that the South Africa’s construction industry will achieve CAGR of 8.93 per cent during the period of 2014-2018.
  • As for India, according to the Indian Construction Equipment Manufacturers’ Association (ICEMA), India’s construction equipment market is expected to grow by a healthy 20-25 per cent over the next few. This would imply a US$16 billion-$21 billion market, up from today’s $3 billion.

Overall, the huge demand for heavy construction equipment from emerging as well as developed economies is expected to accelerate the growth of the ECE market. CE manufacturers in India can take advantage of this trend.

Outlook for ECE manufacturers in India

Keeping these global trends in mind, building construction equipment manufacturers in India have a very bright future. If experts are to be believed, then next few years can be the right time for ECE manufacturers to launch new products in both domestic and international markets. Various strategies can be adopted with an aim to target international markets. They can look at expansions, agreements, contracts, joint ventures and partnerships in the sector to garner a larger share in the market. Moreover, collaborating with other equipment companies could be the key to success. Alliance across industries due to the entry of more diverse and technology-driven products into the marketplace can also help the Indian ECE manufactures to gain a larger share of the global market.