GROUND ENGAGING TOOLS MARKET ANALYSIS

Ground engaging tools are metal components with a high wear resistance that come into direct contact with the ground during construction and excavation activities. These metal components are specially designed for excavators, loaders, bulldozers, and other machines. Mining and construction equipment are the most common applications of ground engaging tools.

Governments of various countries are focusing on investing significantly in the development of smart cities and this is expected to positively aid in growth of the market. For instance, according to the Indian Union budget 2018 -2019, under the smart cities mission, a total of 99 cities have been selected with an outlay of US$ 32.07 billion (Rs 2.04 lakh crore). Under this mission, the projects worth US$ 369.43 Mn (Rs 2,350 crore) have been completed and projects worth US$ 3.82 billion (Rs 20,852 crore) are under progress. Hence, this high investment for smart city projects is expected to accelerate the demand for construction equipment. According to UAE Federal Budget 2017, the government released funds of US$ 381.2 Million (AED 1.4bn) for Sheikh Zayed Housing Programme, and for federal ministry projects, the government released US$ 242.6 Million (AED 891 Mn). Moreover, for power and water projects, the government released the fund of US$ 210 Mn (AED 771 Mn), which will be implemented by the Federal Electricity & Water Authority (FEWA).

Governments’ stringent regulations are leading to the increased processing time for permits for new projects and could hinder demand for mining equipment. This could, therefore, negatively impact growth of the market over the forecast period. 

Global Ground Engaging Tools Market - Impact of Coronavirus (Covid-19) Pandemic

• COVID-19 is an unprecedented worldwide public health crisis that has impacted nearly every business, with long-term consequences that are expected to stifle industrial growth throughout the projection period. Covid-19 has impacted the market dynamics, competition, and global supply chains.
• Sales and revenue of various manufacturing industries decreased gradually in 2020, similarly, the construction industry has been badly hit by COVID-19, owing to capital constraints created by lockdowns and delayed building projects. During the pandemic, new investments in commercial and residential construction projects throughout the world have decreased dramatically, resulting in decreasing demand for construction projects, cash flow restrictions, and unemployment. These factors affected the ground engaging market negatively

North America is expected to hold dominant position in the global ground engaging tools market during the forecast period.

Statistics:

Asia Pacific held dominant position in the global ground engaging tools market in 2021, accounting for 41.0% share, in terms of value, followed by North America and Europe

Figure 1: Global Ground Engaging Tools Market Share (%), By Region, 2021

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Among regions, Asia Pacific held dominant position in the global ground engaging tools market in 2021, and is expected to retain its dominance throughout the forecast period. The factor attributed to growth of the ground engaging tools market in Asia Pacific is due to the increasing growth in the construction sector, especially in emerging economies such as India and China. Rapid urbanization and industrialization are some of the factors that fuel growth of the construction sector. According to the World Bank Group an international financial institution, GDP per capita of India increased from US$ 5.456 in 2012 to US$ 8.154 in 2016. Moreover, increasing   Foreign Direct Investment (FDI) inflows in the infrastructure sector is expected to further accelerate the construction of roads, bridges, and dams. For instance, according to a report by the India Brand Equity Foundation (IBEF), in September 2018, the FDI inflows in the construction sector, which includes townships, built-up infrastructure, and construction- development projects, reached US$ 24.29 billion in 2017 from 24.18 billion in 2016. Therefore, increasing construction activities in emerging economies is expected to drive the demand for construction equipment, which in turn increases demand for ground engaging tools

North America is one of the leading markets for ground engaging tools and it is expected to grow significantly in the coming years. Increasing consumption of electricity in the U.S. is a major factor propelling growth of the global ground engaging tools market in North America. For instance, according to the CIA World Factbook, world's premier foreign intelligence agency, consumption of electricity in the U.S. in 2015 was 3.911 trillion kWh. High consumption of electricity is expected to increase production of coal in the region. For instance, according to the International Organizing Committee for the World Mining Congresses, the production of steam coal in the U.S. in 2013 was 743 730 000 metric tons (mt), which increased to 760 930 000 mt in 2014. Therefore, high production of coal increases usage of machines such as excavators, loader, tractors, and others in the mining sector. This in turn drives the demand for ground engaging tools to enhance the performance of these machine and to reduce their maintenance cost.

Figure 2: Global Ground Engaging Tools Market Value (US$ Mn) Analysis and Forecast and Y-o-Y Growth (%), 2017 - 2030

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The global ground engaging tools market was valued at US$ 7,087.4 Mn in 2021 and is expected to reach US$ 39,594.7 Mn by 2030 at a CAGR of 23.1% between 2021 and 2030.

Major players operating in the global ground engaging tools market include Atlas Copco AB, Caterpillar, Inc., Hitachi Construction Machinery, Komatsu Limited, Sandvik AB, Columbia Steel Casting Co., Inc., Doosan Corporation, USCO S.p.A, Volvo AB, and MB America, Inc.