A View of the Global Construction Equipment Market
Globally the construction equipment industry is one that is on an upward growth path with many interesting trends and factors driving demand.
First off, before we talk about market trends and demand drivers, let us get a sense of the scale of the CE industry worldwide. As per market insight reports, the global construction equipment market size was pegged at a little over USD 129 billion in 2019. It is forecasted to grow at a CAGR of 2.8% and cross USD 160 billion market size by 2027. The Asia Pacific region dominates with an estimated market size of USD 60 billion in 2019. These figures are definitely encouraging for the sector, given how the pandemic has affected every kind of construction activity in countries across the world.
Now if we look at the key trends and growth drivers for construction equipment market worldwide, here are the ones that top the list.
CE MARKET - GLOBAL GROWTH TRENDS
Rising Demand for Construction Equipment Rental Service
CE rental service is a trend that is already prevalent and gaining momentum particularly in the APAC region. This trend can be observed in rapidly urbanising countries such as India and China with intensive infrastructure and construction activity, both public and private.
Heavy earth moving equipment is costly and with newer hi-tech features being added from time to time, the cost of purchasing such machines outright is only going up. Therefore construction equipment manufacturers are witnessing a preference for rental equipment from construction firms, builders and contractors who need the construction machinery only for a temporary duration and want to avoid incurring high purchase and maintenance costs.
This rental business demand is being recognised as an additional and high potential profit stream by many construction equipment manufacturers who are renting out their old and well performing earth moving equipment to their customers. There are several benefits offered by these machines, such as high reliability, safety and flexibility to attach extra tools; that is boosting their proliferation in the market. Hence rental services as a trend is a major contributor to the overall growth of the CE market.
Demand for Technologically Upgraded Equipment
Another global trend driving growth in the CE market is the requirement for technologically upgraded and high-performance construction machinery. Earth moving equipment such as backhoe loaders, are rugged specialised machines equipped to perform heavy-duty construction related earthwork.
The new generation of earth movers are vastly superior in design, with improved engine technology and cutting edge features. These are also smart connected machines, sporting a contemporary digital instrument cluster and advanced onboard diagnostics. Take for example the newly launched range of Mahindra backhoe loaders and Mahindra graders.
The new Mahindra EarthMaster VX IV backhoe loader has the proven and upgraded CRDi Mahindra engine that is compliant with latest CEV Stage-IV emission norms and delivers best-in-class fuel efficiency. It has bigger loader and backhoe buckets for higher productivity, a reinforced structure for better load bearing capacity and improved hydraulics to deliver optimal performance.
The Mahindra EarthMaster VX IV is also equipped with Mahindra iMAXX Telematics technology that enhances operational capabilities. It allows you to stay updated with key vehicle and business information with smart tech features viz. Live Tracking, Accurate Refills, Predictive Vehicle Health Monitoring, Fuel Efficiency Analysis, Fuel Consumption, Theft Alerts, AdBlue® Monitoring, Driver Behaviour Monitoring and a range of Automated Operation Reports.
Increase in Spending on Construction & Infrastructure Projects
Huge government investments in the construction sector for large public infrastructure projects such as roads, highways, schools, hospitals and so on, is being seen in many parts of the world, including North America, Europe and Asia Pacific. Ongoing and planned smart city projects in several countries are also providing a big boost to spending on construction activity.
As per an IBEF report, India’s spends outlay on infrastructure for the next five years i.e. 2020-2025 is approximately USD 1.4 trillion.
All these indicators for increase in big spending on construction and infrastructure projects will shore up demand and keep demand buoyant for the construction equipment market.