The world heavy construction equipment market, which comprises earthmoving, material handling, heavy construction vehicles and others, is expected to grow from around $131 billion in 2013 to $195 billion by 2018, at a CAGR of 8.3 per cent over this five-year period. The heavy construction equipment is primarily used in construction, real estate including residential and commercial development, mining, and various infrastructure sectors like roads and power.
Earthmoving equipment, which has the largest market share in the heavy construction equipment market worldwide, is used in all kinds of geographical terrain. They are mainly used for excavation purposes. Earthmoving equipment includes excavators, loaders, backhoes, graders and motor graders, and other equipment. On the other hand, material handling equipment includes cranes, telescopic handlers and others) while construction vehicles comprise dumpers, tippers, compactors and road rollers, pavers and asphalt finishers, and others.
At present, the BRIC nations (Brazil-Russia-India-China) are driving the growth of this market, as are South Africa and Vietnam, where a lot of construction projects are taking place. Reconstruction activity in Japan following the devastating earthquake of April 2011 is also contributing to the growth of construction equipment in that region.
Among the potentially lucrative markets, “Asia-Pacific has experienced a boom in construction and infrastructure activities as the emphasis on developing infrastructure for sustainable economy is growing. The global population rise and migration to major cities since the last decade has further increased the demand for residential buildings,” MarketsandMarkets, a market research company and consulting firm, said in a report recently. “Asia-Pacific has seen growth in a number of airports, dams, hydroelectric projects etc. to sustain high-level industrial activities and growing energy demand. As a result, many international players have invested and started their manufacturing facilities and distribution centres in the region.”
Broadly, the construction and infrastructure sector consists of both public and private sector projects such as heavy civil works of roads, railways, ports, airports, power, oil and gas, dams and irrigation canals, mining, buildings and structures, sports complexes and stadiums, and other heavy civil construction. Their development forms the backbone of any economy in the world.
Investment in infrastructure is one of the key growth drivers of the earthmoving and construction equipment industry. The Planning Commission has doubled the total infrastructure spend of about $428 billion during the 11th Plan (2007-12) to around $1 trillion for the 12th Plan (2012-17). This is expected to boost the ECE sector which is forecast to grow to $6.3 billion by 2014 at a CAGR of nearly 20 per cent from 2010. In fact, by 2016, India is expected to become the third-largest market for construction equipment.
“The earthmoving and construction equipment market is one of the most dynamically growing markets worldwide, more so in India. Backed by the government’s keen and consistent focus on developing the country’s infrastructure in order to progress holistically, the segment is phenomenally evolving and is deploying the best of machines, technology and manpower to raise its standards to global levels,” Vipin Sondhi, Chairman, EXCON 2013, and Managing Director & CEO, JCB India Ltd, said on the eve of the mega event scheduled to take place in Bengaluru from November 20-24, 2013.