Sunday 24 July 2016

Rapid urbanization and infrastructural growth have fueled Construction Equipment Market



The global construction equipment market size is projected to reach USD 208.36 billion by 2020, growing at a CAGR of over 5% from 2014 to 2020. Rapid infrastructural growth along with urbanization is expected to drive industry growth over the forecast period. Further, increasing investments from government in the infrastructural sector and growing application of the advanced technology in operations including material handling, excavation, and earth moving are expected to drive demand.

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Manufacturers need to consider several factors for maintaining profitability in the price-sensitive industry including cost and energy-efficiency. Several advancements across residential and non-residential sectors are estimated to fuel the construction equipment market.



Growing impetus for developing infrastructure has triggered the demand for rental products combined with cost-competitive OEMs in developing markets of Asia Pacific is estimated to offer prominent opportunities for industry growth over the forecast period. However, unstable economic conditions and high initial costs are expected to hinder revenue by 2020.

The industry can be classified by products into concrete and road construction equipment, material handling machinery, and earth moving machinery. The material handling segment is projected to grow at the fastest CAGR of 5.7% by 2020. This surge in demand can be attributed to growth in application areas and rise in the automation industry.

Earth moving products comprise loaders and excavators, whereas material handling machinery comprises trailer mounted, truck mounted, and crawler cranes. Truck mounted cranes segment accounted for the largest market share of over 60% in 2013 and is expected to decline over the forecast period.

The concrete and road construction equipment market can be sub-segmented into construction pumps, concrete mixers and pavers, etc. These machineries have their application in bridges, power plants, residential, and industrial structures. Growing number of highway construction projects combined with increasing demand from mining industry are anticipated to further augment industry demand.

Asia Pacific construction equipment market accounted for over 50% of the overall share in 2013 and is expected to grow at a CAGR of 5.8% from 2014 to 2020. Varied favorable government policies along with infrastructural developments in service sector and IT industry have triggered equipment usage in countries such as India.

Growing penetration of Chinese machinery in the premium products industry is projected to challenge key existing vendors including Caterpillar and Komatsu. Growing urban population in regions such as North America and Europe is expected to offer considerable growth opportunities for the industry.

Notable players in the construction equipment market are Komatsu, Volvo, Hitachi, Doosan, Caterpillar, and John Deere. Various vendors in Europe and North America are increasing investment in R&D activities for lowering production costs along with meeting regulation emission for strengthening their global presence. 

Mergers & acquisitions and strategic expansions for bridging the gap in product offerings and end-market requirements, remain to be the notable growth strategy for players to excel in the industry.

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