The global heavy construction equipment market is expected to reach USD 90.4 billion by 2025 at a CAGR of 5.4%, according to a new report by Grand View Research Inc. Increased investment in infrastructure has been a major factor driving market growth.
Rise in infrastructural development around the world is the key catalyst that will propel market growth over the forecast period. Infrastructural development results in increased construction activities, which eventually creates a demand for heavy duty construction equipment.
Developed infrastructure boosts economic growth by assisting cross-border trade and industrial growth.
Private financing is a key way to fund infrastructural development plans. For instance, infrastructure development in India has witnessed increased participation of private players in recent years.
Moreover, the Indian government has increased its budget for infrastructural development.
The heavy construction equipment market is likely to witness high demand due to various government initiatives to expand airports globally. As of January 2015, global investments for construction of airports was nearly USD 540.0 billion. For instance, news reports suggest that the total number of passengers traveling via Mumbai (India) airport has tripled in the last decade. To overcome this, the Indian government has approved an investment of USD 2 billion for the construction of the Navi Mumbai airport, which will help distribute domestic and international passengers. Development plans such as these are sure to give the global market a major boost.
Further key findings from the report suggest:
- The global heavy construction equipment market demand was valued at USD 55.9 billion in 2016 and is expected to register a CAGR of 5.4% from 2017-2025. Increased investments in the infrastructure sector, especially in developing countries such as India, Malaysia, and Indonesia, is a key factor.
- Earthmoving machinery emerged as the largest product segment and is estimated to generate a revenue of USD 36.6 billion by 2025. This can be attributed to rise in investments to develop airports across the globe.
- Real estate is anticipated to be the fastest-growing application segment over the forecast period with a CAGR of 6.3%. This sector is driven by development of smart cities in countries such as India, France, and Singapore.
- Asia Pacific is anticipated to register the fastest growth, registering a CAGR of 6.6% by 2025. This can be attributed to growth of construction activities in countries such as India, Malaysia, and China.
- Key market players include Komatsu Ltd.; Volvo; Caterpillar Inc.; and Hitachi Construction Machinery. Market players have forward integrated their operations to gain competitive advantage in the global market.
- In 2016, SRB Group of India entered into a joint venture with Russia-based Uralmash Machine-Building Corporation to manufacture heavy-duty construction equipment for the Indian market.