Forecast sees global demand for heavy equipment growing

The heavy construction equipment market is driven by rapid urbanization and increasing infrastructure development and spending, according to a report from Lewes, Delaware-based Verified Market Research, saying the sector will grow globally at an annual compound annual growth rate (CAGR) of 6.81 percent from 2024 to 2031.

The 202-page report, titled “Global Heavy Construction Equipment Market Size,” concludes the overall heavy construction equipment market can be valued at about $140.1 billion currently, but that valuation is expected to reach $253.5 billion by the end of 2031.

Among the factors leading the steady manufacturing and sales rate of excavators, material handlers, wheel loaders and other such equipment, Verified cites rapid urbanization in Asia and Africa as a driver.  

“The demand for sophisticated machinery is driven by the increasing necessity for robust infrastructure as cities expand,” the report says. “This urban expansion accelerates construction activities, resulting in increased sales and investments in heavy construction equipment.”

Globally, Verified says government investments in public works, energy security and transportation mean equipment manufacturers and suppliers are provided with ongoing opportunities as a result of these investments, which promote market expansion.

Verified also finds challenges in the sector, including that some potential buyers may be discouraged by the substantial capital necessary for the acquisition and operation of sophisticated machinery, putting a ceiling on their appetite for automation.

The report also points to "stringent environmental regulations" as resulting in costly upgrades and modifications that can result in a decrease in profit margins and an increase in operational costs for manufacturers.

Of interest to metals recyclers, the report says volatile raw material prices can expose equipment makers to fluctuations in the costs of steel, aluminum and other critical materials that complicates the budgeting and financial planning processes for both manufacturers and consumers.

Verified says the current heavy construction equipment market is characterized by geographical dominance, with corporate headquarters and manufacturing bases in North America, Europe and portions of the Asia-Pacific region occupying the majority of market share.

At the start of its 2024-2031 market study time frame, Verified cites as “major players” in the sector Deere & Co. and Terex Corp., based in the United States; Hyundai Construction Equipment Co. Ltd. and SANY Group, based in Asia; and JCB, AB Volvo and CNH Industrial, based in Europe, and says they may play a "pivotal" role in shaping the future of the heavy construction equipment market.

Verified's report includes financial statements, product benchmarking and strengths-weaknesses-opportunities-threats (SWOT) analyses of the industry's "key players."