According to our new research study on "Construction Equipment Market Forecast to 2028 - COVID-19 Impact and Global Analysis - by Equipment Type and Application," the market is expected to grow from US$ 126,062.8 million in 2022 to US$ 223,451.1 million by 2028. It is estimated to grow at a CAGR of 10.0% from 2022 to 2028.
The COVID-19 pandemic resulted in a significant reduction of economic activity worldwide. However, the situation has since improved with massive investments being made in infrastructure, driving growth in the industry. These investments are spurring the demand for construction equipment, especially in areas such as electricity generation, national highway construction, and railways and shipping cargo. The infrastructure industries of coal, crude oil, steel, and cement have shown growth in emerging economies in 2021, which is also positively impacting the construction equipment market growth.
Infrastructure investments can have a long-term impact on product development, leading to potential GDP growth. Many countries, especially in the Middle East, have established economic forums that focus on infrastructure development projects in the region. Additionally, the reliance on communication infrastructure, such as telecommunications and broadband services, has increased significantly due to the pandemic. OECD reported a 60% increase in internet traffic since the crisis in 2020. To facilitate communication with employees and consumers, businesses and educational institutions have increasingly turned to digital solutions and channels.
The global construction equipment market has been negatively impacted by the COVID-19 pandemic, with reduced sales observed worldwide. The market is affected both positively and negatively by factors such as infrastructure investments, residential, commercial, and industrial building, mining, and institutional expenditure. Countries such as the US, UK, China, and India have been disproportionately affected. Nevertheless, there is a high demand for construction equipment in projects related to hospitals, medical facilities, laboratories, and transportation. Some countries are gradually resuming activities in various markets, including the construction equipment market.
Impact of COVID-19 Pandemic on Construction Equipment Market
The construction equipment market suffered in 2020 due to the impact of the COVID-19 pandemic on construction activities, which typically follow a cyclical pattern. The World Economic Forum predicted a decline of around 5% in 2020. The global lockdowns imposed by many countries led to expectations of a 20-40% annual drop in equipment sales. While there was a significant decline in the second quarter of the year, the market began to recover by June 2020. Overall, the North American and European markets experienced a 16% annual decline in sales compared to 2019. Despite some fluctuations, most markets remained relatively stable in 2020, with the construction sector gradually resuming near-normal levels of activity after the initial lockdowns. In addition, there has been an observed increase in household repair and maintenance activities in several countries, possibly due to many office workers being required to work from home and spending money on renovating or expanding their homes to create home offices. As a result, the sales of compact equipment such as mini excavators and different types of compact loaders have experienced a more moderate decline than other equipment types, or even a slight increase in some cases. Moreover, various countries, including India and China, have started to resume activities in various industries, such as the construction industry, and have initiated new industrial and commercial construction projects. This has led to a surge in demand for construction equipment such as excavators, backhoe loaders, compactors, and dozers. Industrial output climbed in April 2021 for the first time since January 2021 because of these new projects being implemented in countries around the world.
Key Findings of Study
The construction equipment market is divided into five main regions, namely North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). In North America and Europe, the market is being driven by technological advancements, the presence of major companies, the rapid acceptance of new technologies, improved economic conditions, and increased manufacturing infrastructure. The involvement of the private sector in infrastructure projects, particularly those involving private investment, can lead to increased efficiency if private developers are given the opportunity to use their risk-management expertise through genuine risk and responsibility transfers. Traditional procurement methods that pay little attention to commercial and financial issues do not produce the same results. When private sector participants are involved at the optimal level of participation and risk transfer, they bring specific risk-management skills, a long-term perspective, and an interest in the project, and they absorb other risks without the fear of going bankrupt. As a result, the increasing number of public-private partnerships is fuelling the growth of the construction equipment market.
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