Demand for Smart Off-Road Technology to Climb Six Times Faster than Total Equipment Sales Through 2026

Cleveland OH, April 27, 2022 – A new Freedonia Group analysis projects smart off-road equipment sales to grow 35% in 2022 and then more than double by 2026, when they will account for nearly 5% of all off-road equipment demand.

Construction is currently the largest market for smart equipment, although demand will expand most quickly in the mining sector (which is expected to become the leading market for smart off-road equipment technology by 2026) as operators increasingly use advanced technologies – such as autonomous equipment and digital mine management solutions – to lower costs and boost output.

Among the four major off-road equipment product segments, smart technologies have seen the most penetration in mining machinery due to the following factors:

• Mine applications are particularly well suited for autonomous equipment and robotics, as mining tasks are generally repetitive over a long period and take place in an enclosed environment.
• Mining firms typically have the financial resources to absorb the high costs of advanced smart equipment, while costs are a more significant hurdle for many construction or agricultural projects.

Rising Labor Costs & Tightening Emissions Standards Drive Purchase of Advanced Equipment

High production costs and labor shortages mean that advanced off-road equipment is typically most cost effective in high-income countries such as Australia, Canada, Germany, and the US. Use of state-of-the-art technology will remain limited in lower- and mid-income nations, where profits are less influenced by labor costs and emissions standards are generally less stringent. The mining industry is a notable exception, since many of the world’s largest mines – which are operated by multinational companies that can afford advanced, high-end machinery – are located in lower-income countries.

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Global Off-Road Equipment 2022 provides global off-road equipment demand for 2020, 2021, 2022, and 2026 at the manufacturers’ level in current US dollars (i.e., not adjusted to account for inflation). Demand is segmented by equipment type and world region. Data include the value of replacement parts and attachments sold separately. Values do not take into account retail markups. Also excluded are the values of software and services.

Off-road equipment demand is segmented by the following machinery types:

• construction
• agricultural
• mining
• forestry

The study also provides estimates of demand for smart machinery by equipment type. While demand for drones is presented in the study, it is not included in the equipment demand totals. Also, drones used by government agencies or environmental groups to monitor forested land are excluded from the study.

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