Challenges and Opportunities in the Construction Equipment Market

According to the latest publication from Meticulous Research®, the construction equipment market is projected to reach over $236.9 billion by 2031, growing at a CAGR of 5.3% from 2024 to 2031. This market expansion is primarily driven by increasing government investments in construction and infrastructure development, along with a growing need to enhance efficiency, productivity, and safety across various construction projects. Additionally, the surge in automation of construction equipment is expected to create substantial growth opportunities within the market. However, stringent international trade policies and mandates, coupled with the high cost of construction equipment, may restrain market growth. The lack of skilled equipment operators is another major challenge impacting the market’s growth.

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Prominent trends in the construction equipment market include the rising demand for compact construction equipment and the increasing adoption of electric construction equipment. The market is segmented by type, propulsion type, and end user, with an extensive evaluation of industry competitors and an analysis of regional and country-level markets. Based on type, the construction equipment market is broadly segmented into material handling equipment, concrete and road construction equipment, earth-moving equipment, and other construction equipment. In 2024, the material handling equipment segment is expected to account for the largest share of 40.0% of the market. This can be attributed to the rapid pace of industrialization worldwide, modernization of industrial infrastructures to augment production capacity, and the growing demand for material handling equipment to facilitate smooth material movement, reduce reliance on manual labor, and enhance overall productivity.

The earth-moving equipment segment is projected to register the highest CAGR during the forecast period. This growth is driven by increasing investments in residential, commercial, and industrial construction projects, and the rising demand for earth-moving equipment for various applications such as laying foundations, grading soil, removing dirt and rocks, digging trenches, and conducting demolition works. Partnerships among market players to expand their offerings are also contributing to this segment's growth. For instance, in January 2022, CanLift Equipment Ltd. (Canada) expanded its product line for construction machinery through a strategic partnership with Xuzhou Construction Machinery Group Co., Ltd (China), enhancing sales of earth-moving equipment in Ontario.

Based on propulsion type, the construction equipment market is segmented into ICE, electric, and CNG/LNG. In 2024, the ICE segment is expected to account for the largest share of 53.0% of the market. This segment’s dominance is due to the ease of use and high power-to-weight ratio offered by ICE construction equipment, the lower cost compared to electric alternatives, and increasing initiatives by market players to expand their product portfolios. For instance, in January 2023, Crown Equipment Corporation (U.S.) expanded its lift truck portfolio by launching IC and electric counterbalance forklifts capable of carrying up to 5.5 tons.

However, the electric segment is projected to register the highest CAGR during the forecast period. The growth of this segment is driven by the benefits offered by electric construction equipment, such as lower operating expenses and minimal maintenance requirements. Supportive government initiatives aimed at promoting the adoption of electric construction equipment and the rising focus of market players on product launches and enhancement also contribute to this segment’s growth. For example, in February 2023, Action Construction Equipment Ltd. (India) announced the launch of its electric crane with a lifting capacity of 180 tons.

The construction equipment market is also segmented by end user into construction companies, government agencies, private contractors, aerospace & defense companies, mining companies, and other end users. In 2024, the construction companies segment is expected to account for the largest share of 55.0% of the market. This segment’s large market share can be attributed to the increasing investments in infrastructure development globally, the growing adoption of advanced equipment by construction companies to enhance project speed and efficiency, and the shortage of labor in the construction sector. Additionally, the construction companies segment is projected to register the highest CAGR during the forecast period, driven by increasing investments by leading companies in developing advanced construction equipment. For instance, in September 2023, Skanska (Sweden) initiated a pilot project involving a zero-emissions electric excavator on the Los Angeles Metro’s Purple (D Line) Extension Transit Project.

Geographically, the construction equipment market is segmented into North America, Asia-Pacific, Europe, Latin America, and the Middle East & Africa. In 2024, Asia-Pacific is expected to account for the largest share of 45.0% of the market. This significant market share is attributed to increasing investments in construction projects, a rising focus on sustainability, efficiency, and safety within the construction industry, rapid growth in the real estate sector, and the expansion of rail and road infrastructure across the region. Moreover, the market in Asia-Pacific is projected to register the highest CAGR of 7.0% during the forecast period, driven by the increasing demand for sustainable construction equipment and rising initiatives by key market players to expand their presence in the region. For instance, in July 2023, Volvo Construction Equipment (Volvo CE) established a dealership in Kuching, Sarawak, to cater to the rising demand from Malaysian customers.

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Jane Doe is a seasoned content writer and market analyst specializing in insightful blogs and projections, blending creativity with data-driven strategies.