EARTH MOVING EQUIPMENT MARKET ANALYSIS

Market Overview

Earth moving equipment or also referred to as heavy equipment is heavy-duty vehicles designed for execution of construction tasks that mainly revolve around earthwork operations or other large construction tasks. Different types of heavy-duty vehicles are used in earthwork operations including crawlers, wheeled excavators, backhoe loaders, wheeled tractors, bulldozers, skid steer loaders, motor graders, etc. Furthermore, mini excavators are used to digging the surface or for demolition purposes. These excavators are smaller than other types therefore, used for small to medium-sized projects. Backhoe loaders or mechanical excavator whose bucket is attached by a hinge to a two-part arm and is drawn back to the machine when in operation.

The global Earth Moving Equipment Market was accounted for US$ 137444.1 Mn in terms of value and 970,199 Units in terms of volume in 2019 and is expected to grow at CAGR of 7.1% for the period 2020-2027.

Market Dynamics- Drivers

1. Ongoing infrastructure projects are expected to drive growth of the global earth moving equipment market during the forecast period

Growing infrastructure projects such as railway, dams, highways, bridges, and roads are major factors boosting the demand for earth moving equipment. For instance, there are numerous ongoing infrastructure projects including Panama canal expansion, Gujarat International Finance Tech City (India), Hudson Yards Redevelopment Project (U.S.), Riyadh Metro (Saudi Arabia), Khazar Islands (Azerbaijan), Al Maktoum Airport (UAE), Jubail II (Saudi Arabia), Dubailand (UAE), South to North Water Transfer Project (China), and London Crossrail Project (UK). Thus, these factors are expected to drive growth of the global earth moving equipment market during the forecast period.

2. Growing urbanization is expected to propel the global earth moving equipment market growth over the forecast period

In emerging economies such as Argentina, India, Brazil, and China, urbanization has increased significantly in the recent past. With the support of government in providing loans, an increase in FDI, and subsidies, the construction of commercial spaces is increasing day by day. Furthermore, increasing in population combined with demand for residential areas are other factors expected to propel the global earth moving equipment market growth in the near future.

Statistics:

Asia Pacific held dominant position in the global Earth Moving Equipment market in 2019, accounting for 57.04% share in terms of value, followed by North America and Europe, respectively

Figure 1: Global Earth Moving Equipment Market Share (%) in terms of Value, By Region, 2019

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XYZ Market - Impact of Coronavirus (Covid-19) Pandemic:

Many governments around the globe such as India, Spain and Italy have imposed nationwide lockdown to prevent the spread of COVID-19 disease. For instance, India have imposed lockdown from 25 March to 1 May until the further notice. Lockdown resulted in the shortage of the workers at the construction sites. Due to the manpower shortage the construction sites are struggling to operate the earth moving equipment. Skilled workers are required to operate the earth moving equipment. Owing to above mentioned factors, the COVID-19 is expected to restrain the market growth during the year 2020.

Market Dynamics- Restraints

1. Strict regulatory policies regarding emission are expected to restrain growth of the global earth moving equipment market during the forecast period

Strict regulatory emissions related to construction & mining equipment are major factors restraining demand for earth moving equipment. Government agencies such as Environmental Protection Agency (EPA) impose heavy penalties on manufacturers who are unable to comply with standard norms. This is due to the fact that construction industry utilizes more diesel engines than other sectors. However, these norms vary from territory to territory and region to region. Thus, these factors are expected to restrain growth of the market during the forecast period.

2. Major concerns on safety & security are expected to hinder the global earth moving equipment market growth over the forecast period

Majority of equipment used on construction, mining, forestry, farming, and other industries are difficult to operate and should be handled with extreme care. Since this equipment is heavy and bulky, if they are not properly handled it could lead to injury or even death. This, in turn, is expected to hinder the global earth moving equipment market growth in the near future. According to the International Labor Organization (ILO), around 2.3 million people die every year, owing to accidents at workstations and occupational ailments. In economics terms, four percent of GDP is lost owing to occupational diseases and accidents.

Market Opportunities

1. Increase in government investment can present lucrative growth opportunities

In each country, construction & mining sectors contribute to the growth of the country’s GDP. Furthermore, the governments are announcing new construction projects in next 10 years, which in turn, is expected to present excellent growth opportunities for market players in the near future. Some of the ongoing projects, which will be completed in next few years are Eight City (South Korea), Sabine pass LNG Terminal Expansion (Louisiana), Khazar Islands (Azerbaijan), SmartCity, Kochi (India), and Abdali Project (Jordan).

2. Rising private-public partnership (PPP) to offer major business opportunities

Public and private sectors are making major investments in infrastructure combined with commercial and residential construction projects. The public-private partnership helps private investors with better guarantees and better institutional legal frameworks to accelerate country’s infrastructure construction. Some of the PPP projects include NH45 between Madurai and Chennai and Trichy (India), the port of Wilmington PPP project (U.S.), etc.

Figure 2: Global Earth Moving Equipment Market Value (US$ Mn), 2017 - 2027

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The global Earth Moving Equipment market was valued at US$ 137,444.1 Mn in 2019 and is forecast to reach a value of US$ 238,164.0 Mn by 2027 at a CAGR of 7.1% between 2020 and 2027.

Market Trends

1. Rental & leasing services is a major trend

According to Coherent Market Insights’ analysis, the construction sector creates 100% employment opportunities. Since earth moving equipment is relatively expensive and requires regular maintenance, majority of end users often lease or rent them. Some of the equipment that can be leased are backhoe loaders, excavators, bulldozers, crawler loaders, and motor graders. Leasing opens up an opportunity for builders to customize the equipment for their project purposes, get high level personal advice, and technical support.

2. Integration of GPS system into earth moving equipment

Majority of manufacturers are integrating GPS machine control systems into the design of backhoe loaders, excavators, motor graders, and bulldozers. Installation of machine control systems in their equipment helps to improve the efficiency and allow the user to work from their office without physically present on sites. Furthermore, by reducing the need for rework and decreasing material wastage, machine control can help to improve the sustainability of operation.

Competitive Section

Key players operating in the global earth moving equipment market are Caterpillar Inc., Komatsu Ltd., Hitachi Construction Machinery Co. Ltd., Terex Corporation, Volvo Construction Equipment, Liebherr Group, Deere & Company Xuzhou Construction Machinery Group Co. Ltd., Larsen & Toubro, Sany Heavy Industry Co Ltd., and Doosan Corporation.

Key Developments

1. Major companies in the market are involved in product launches, in order to enhance the product portfolio. For instance, in December 2019, Doosan Corporation introduced the Concept-X autonomous construction site concept at CONEXPO 2020.
2. Key players in the market are involved in product development, in order to gain a competitive edge in the market. For instance, in Sany Heavy Industry Co Ltd. twelve new products at Excon 2019, which is the largest construction equipment exhibition in South Asia.