COMPACTION MACHINES MARKET ANALYSIS

Compaction is a process used to compress materials in terms of size. Soil compaction is the most common example, wherein it provides strength and stability to the soil and decreases the permeability and erosion of soil. A compaction machine is a mechanic device used to compact trash, gravel, soil, concrete or asphalt during the construction of roads, airports, and dams. Compaction machines play a vital role in a plethora of road construction projects. Compaction machines are typically used to remove air and water movement from the soil and decrease pore spaces. Different machines and equipment are used in compaction including rammers, smooth wheeled Rollers, pneumatic tiered Rollers, sheepsfoot Roller, pad foot Rollers, etc. These machines are used for compaction of broken stones, sand, soil, etc.

The global compaction machines market is estimated to be valued at US$ 4,955.1 million in 2021 and is expected to exhibit a CAGR of 6.5% over the forecast period (2022-2030).

Recent Developments:

1. In September 2021, Volvo Construction Equipment is a manufactures of construction equipment unveiled its CX01 single-drum asphalt compactor concept at The Utility Expo in Louisville, Kentucky.
2. In September 2020, Volvo Construction Equipment a manufactures of construction  launched DD128C compactor has the highest frequency also it delivers fastest rolling speeds
3. In August 2021, Wirtgen Group German company in the construction industry launched two new HAMM Tandem Rollers the HD 99i and HD 109i in the Indian market. 

Europe (Region) held dominant position in the global compaction machines market in 2020, accounting for 42% share in terms of volume, followed by Asia Pacific and North America, respectively.

Figure 1. Global Compaction Machines Market Share (%), By Region, 2021

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Global Compaction Machines Market: Drivers

Increasing infrastructure development is expected to drive growth of the global compaction machines market during the forecast period. Compaction machines play a crucial role in infrastructure development activities. According to Coherent Market Insights’ analysis, global roadway infrastructure grew by over 35% in the past decade, wherein India and China accounted for more than half of paved roads. Moreover, China increased its paved roadways network around three times since 2000. According to the International Energy Agency (IEA), China will surpass the U.S. in annual road vehicle kilometers by 2025 and is expected to continue to build and maintain new roadways at a significant rate. Moreover, according to CMI’s analysis, the investments in infrastructure are expected to reach around US$ 57 trillion or 3.5% of global GDP, of which US$ 16.5 trillion will be invested in new road construction and maintenance.

Rising number of paved roads is expected to propel the global compaction machines market growth over the forecast period. The perpetual requirement to develop good quality roads is the factor driving growth of sustainable development and economy across the globe. According to Coherent Market Insights’ analysis, by 2025, expenditure on road pavements is expected to triple from today’s level and would occupy 80% of the present road network. According to the same source, since 2010, global roadways network length increased by approximately 12 Mn lane Km. China and India accounted for more than 50% of paved lane Km additions during that period. Moreover, paved lane Km accounted for 53% of the total global road lane Km in 2000, whereas by 2010 only about 60% of total road lane km were paved.

Global Compaction Machines Market: Opportunities

Many financial institutions are providing financing solutions to procure heavy compaction machines. According to CMI’s analysis, the ECE financing industry is expected to exhibit a CAGR of 22% during the forecast period. Majority of financing solutions are available in the forms of loans, with leasing as a distant second option. Around 80% of ECE users that opt for finance such as ventures are small and medium-sized enterprises. Major financial institutes involved are HDFC and Kotak Mahindra, non-banking financial companies (NBFCs) such as Magma Fincorp, leasing companies such as ORYX India and Srei BNP Paribas, external commercial lenders, and cross borders leasing firms.

Intelligent compaction is the compaction of road materials such as aggregate base, soil or asphalt pavement materials using compaction Rollers equipped with global positioning systems (GPS), which is based on mapping sensors and optional feedback controls. It is one of the crucial developments made in roadway construction and has been widely adopted in Europe and China.

Market Trends

The outlook of the U.S. housing market, remains buoyant with the number of new projects to rise by 20%. Rental companies and dealers also reported increased business on the back of rising demand from the industrial and construction sectors. For instance, The American Rental Association for heavy compaction machines anticipates a revenue increase of 8.1% in 2015. According to the Association of Equipment Manufacturers (AEM), the US construction machinery exports dropped to 17.3% during the first half of 2014, compared to the previous year.

The investments in infrastructure has increased significantly in Latin America in the recent past. According to Coherent Market Insights’ analysis, Latin America is expected to account for around 3% of the total global construction spending in 2015, which is anticipated to reach 4% by 2020. As the Olympics were hosted by Brazil in 2016, a substantial amount was invested into infrastructure development in Latin America.

Figure 2. Global Compaction Machines Market Value (US$ Mn) Analysis and Forecast, 2017 - 2030

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Key Takeaways of the Graph:

• The global compaction machines market was valued at US$ 4,955.1 Mn in 2021 and is expected to reach US$ 8,525.0 Mn by 2030 at a CAGR of 6.5% between 2021 and 2030.
• The Heavy Compaction Machines held dominant position in the market and accounted for 7% share in the global compaction machines market in 2021. The segment is expected to reach US$ 6,624.5 million in 2030, owing to growing demand and adoption of heavy compaction machines for major construction projects including highways and airports construction.

Global Compaction Machines Market: Restraints

Strict environmental policies are expected to restrain growth of the global compaction machines market during the forecast period. The compaction machines, during operation, emit harmful gases such as carbon dioxide and nitrous oxide. Thus, meeting the strict fuel emission standards set by regulatory authorities is a major challenge for market players.

Low labor productivity in road constructions & maintenance is expected to hinder the global compaction machines market growth over the forecast period. The labor productivity in road construction and maintenance is significantly low. According to Coherent Market Insights’ analysis, in the U.S., Germany, and Japan, the labor productivity sector has not increased for the past 20 years.

Competitive Section

Key players operating in the global compaction machines market are Wacker Neuson SE, Sany Heavy Industry Co. Ltd, Volvo Construction Equipment, Wirtgen Group, Caterpillar Inc., Atlas Copco, Terex Corporation, Zoomlion Heavy Industries Science & Technology Co Ltd, Fayat Group, BOMAG GmbH, and XCMG Co. Ltd.

Global Compaction Machines Market: Key Developments

1. Key companies in the market are focused on product launches, in order to enhance the market presence. For instance, in December 2017, Sany Heavy Industries Co. Ltd introduced 6 clutter-breaking products at EXCON 2017.
2. Major players in the market are involved in product launches, in order to enhance product portfolio. For instance, in April 2019, Caterpillar Inc. showcased its 20 brand new machines at Bauma 2019, Germany.