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Global demand for construction machinery is forecast to grow 4.1% per year to $250 billion 2025, supported by:
rising construction activity – aided by factors ranging from population growth to increasing industrial output – and infrastructure spending
advances in worldwide mining and forestry activity and energy production, supported by a recovery in commodity prices from 2020 lows
increasing replacement sales of global construction equipment, after many operators delayed machinery purchases in 2020
the introduction of newly developed, state-of-the-art construction equipment, which will cost considerably more than predecessors
rising sales of replacement parts and attachments as the amount of equipment in use around world increases
Outside of China – which had an elevated level of 2020 product sales – annual growth was slower between 2015 and 2020 (1.3%) and will be noticeably faster through 2025 (5.3%).
China’s Strong 2020 Performance Will Impact Global Forecast for Construction Machinery
Due to the COVID-19 pandemic, most countries experienced declining construction machinery sales in 2020 as economic conditions weakened, international trade decreased, and many currencies depreciated against the US dollar. These nations recorded losses of 5% to 20% in 2020, wiping out a large portion of gains recorded since 2015. However, China proved to be an exception to this trend. A surge in government stimulus spending, coupled with the country mitigating the most significant impacts of the pandemic at a relatively early date, prompted double-digit gains in construction equipment demand and prevented even greater global losses.
Through 2025, however, China will underperform most major markets and restrain the average global rate of growth, owing largely to its strong 2020 performance. First, growth will occur from a high 2020 base. Second, numerous Chinese operators invested in new equipment and replaced aging machines in 2020. Most other national markets will record a strong rebound in construction machinery demand through 2025, with particularly strong gains coming during the first part of the forecast period.
Technological Innovation to Drive Market Gains
Industry leaders are currently developing the next generation of construction equipment – ranging from alternative fuel trucks and semi-autonomous excavators – which will be considerably more productive, efficient, and environmentally friendly. New models will feature a variety of innovative technologies, such as advanced sensors, electric engines, and sophisticated data collection capabilities. For example:
Caterpillar offers excavators with technology that calculates real-time payload estimates without swinging to help prevent over- and under-loading trucks.
Komatsu offers dozers that are equipped with capabilities that enable automatic tilt steering control and automatic spreading of fill material.
The incorporation of such technologies into new models will spur both new and replacement equipment sales and drive up average construction equipment prices.
Trends in the mature global construction machinery market tend to be highly cyclical because of several related factors:
The construction sector is a critical component of every economy and among the first to develop.
Roughly three-fourths of global demand for construction machinery is concentrated in a dozen countries, the majority of which feature markets that are at a later stage of development.
Replacement product sales – which are highly cyclical – are the primary driver of growth in most mature markets and play a key role a number of large developing markets (e.g., China).
The leading end-use markets for equipment – construction, mining, forestry, agriculture and energy production – also exhibit cyclicality.
Construction machines have a long lifespan.
Because of these factors, a period of strong growth – during which operators replace outdated machines and invest in new models – is frequently followed by a significant moderation.
Other factors can have a positive or negative impact on the global construction machinery market’s growth cycles, including:
economic conditions, levels of international trade and foreign investment, and fixed investment spending trends
changes in the value of a country’s currency
changes in construction activity, government infrastructure spending, and to a lesser extent, mining, forestry, and agricultural activity, and energy production
the increasing or decreasing availability of construction machinery and changes in the cost of equipment
the introduction of new construction equipment technologies, which can spur both new and replacement machinery sales
the adoption of emissions regulations, and technical and safety standards
Typically, a growth cycle lasts three to seven years for mature markets, although this range varies from country to country. Developing nations frequently see prolonged periods of growth as operators begin to use the equipment more intensively and shift toward more capable, higher priced models. Replacement sales are a smaller driver of gains in these markets because their stocks of equipment are quite small and relatively new.
This comprehensive study analyzes global supply of and demand for construction machinery. The following types of products are covered:
excavators, including crawler-mounted, wheeled, hydraulic, and cable-types
loaders (wheel, skid steer, crawler, and backhoes)
cranes (e.g., truck-based and tower cranes, rough terrain and all-terrain, telescopic, crawler) and draglines
dozers (angledozers, bulldozers, wheel dozers, and crawler dozers) and off-highway trucks (also known as haulers; include one-piece, or rigid frame haulers, or two or more sections, or articulated haulers)
mixers, pavers, and related equipment
concrete mixers and concrete mixer trucks, mortar mixers, sand mixers, slag mixers
inset pavers, roller screed pavers, stabilizers and reclaimers, tracked and wheeled pavers, texture and cure machines
asphalt screeds, concrete pumps, milling machinery/planers
graders, rollers, and related equipment (including scrapers and embankment and landfill compacters)
separately sold replacement parts and attachments (auger drives, blades, buckets, couplers, drills, grabs, hammers, shovels, etc.)
Construction machinery used in mining, energy, forestry, and other non-construction applications (e.g., agriculture) is included in this study. The study covers both self-powered and non-self-powered machinery.
However, excluded from the scope of this report are:
handheld equipment, such as jackhammers
certain products sometimes considered to be construction equipment, including aerial work platforms, dredging machinery, forklifts and telehandlers, industrial cranes, log splitters, pile driving equipment, and tunneling machinery
cranes used in seaports (specifically those for maritime applications) and in other industrial settings, such as gantry or overhead cranes
used construction equipment
rental and leased equipment
sales of parts and attachments to new machinery OEMs
Historical data for 2010, 2015, and 2020, and forecasts for 2025 and 2030 are provided for demand by product type, total production, and net exports on a country-by-country basis in millions of current US dollars, including inflation. Also provided at the world level is construction machinery demand by product type in thousands of units.