Crane market: In motion

Chris Sleight, Off-Highway Research managing director.

In collaboration with KHL Group (publisher of Crane and Transport Briefing), SC&RA benefits from access to insight by way of Off-Highway Research (OHR) – a consultancy renowned for its expertise in analysing global construction and agricultural equipment markets.

Founded in 1981 as part of The Economist Intelligence Unit (EIU), OHR was acquired by KHL Group in 2015, solidifying its position as a leader in international market research.

The firm provides unparalleled research and analysis for industries spanning construction, earthmoving, mining, industrial and agriculture. According to Chris Sleight, OHR managing director, the construction equipment sector, a key driver of global infrastructure, has undergone notable changes in recent years.

With a focus on helping SC&RA members position their businesses in the next fiscal year within both North America and developing markets worldwide, Sleight recently shared an in-depth perspective on the opportunities, hurdles and future trajectory of an industry critical to shaping the modern world.

[While annual figures may fluctuate slightly, Sleight notes the overall trends in the construction equipment market remain consistent. Updated data for 2024 is anticipated in spring 2025.]

“The global construction equipment market continues to navigate a landscape shaped by diverse regional dynamics, technological advances and varying government policies,” explained Sleight. “While North America often takes centre stage as the largest market by dollar value, the broader global market offers significant insight into emerging opportunities and persistent challenges.”

Much of the construction equipment growth in North America is propelled by factors such as population expansion and urbanisation, which drive demand for housing and infrastructure. Source: ©Off-Highway Research

That market, noted Sleight, including key segments such as earthmoving, materials handling and road-building equipment, reached a valuation of approximately US$130 billion in 2023. “North America accounted for around fifty billion dollars US, maintaining its position as the largest market in monetary terms,” he said. “However, China occasionally rivals North America in volume due to government-driven stimulus measures, though its lower-cost equipment means it lags behind in dollar value.”

Over the past decade, Sleight indicated, global market trends have been marked by cyclical peaks, with the latest highs occurring during the pandemic. “The surge was driven by low interest rates and direct economic stimuli, which boosted infrastructure and construction projects worldwide. But despite the cyclical nature of the market, the long-term trajectory remains positive, with a steady annual growth rate of approximately three per cent.”

Wider adoption

Around the world emerging economies often exhibit more dramatic growth trajectories compared to developed nations, Sleight maintained. “India, for instance, has emerged as the third-largest market for construction equipment, accounting for around eight per cent of global demand. And with an annual growth rate of approximately eight per cent, India exemplifies the potential in regions where urbanisation and infrastructure development are accelerating.”

Similarly, he pointed out, countries like Indonesia, Brazil and South Africa, which rely heavily on commodities, experience market booms when commodity prices rise. “These nations’ revenues from resource extraction often translate into investments in roads, affordable housing and utilities,” he said.

As always, China remains a critical player, Sleight emphasised, particularly in electrification and mining equipment. “Approximately thirty per cent of the Chinese wheel loader market now consists of electric models, a trend bolstered by government subsidies and fixed-site mining operations. These conditions allow for high utilisation rates and quicker payback on investments in electric equipment, which drives adoption.”

Despite high interest rates, North America’s housing market has shown resilience, prompting steady gains in the construction-equipment market. Source: ©Off-Highway Research

In contrast, he explained, developed regions such as Europe, Japan and North America focus more on maintaining and modernising existing infrastructure. Repair and maintenance dominate these markets, with significant investments in renewing aging roads, bridges and housing stock.

“For example, North America’s housing market remains robust despite high interest rates, driven by the need for new homes and updates to older structures. These efforts are often influenced by evolving building codes and increasing demands for energy efficiency.”

Developed economies also demonstrate a gradual shift toward compact and electric equipment, acknowledged Sleight. “However, challenges such as high costs and insufficient charging infrastructure have slowed widespread adoption. In Europe, zero-emission zones and subsidies have spurred progress, while North America lags behind, reflecting varied legislative and economic conditions.”

That said, he added, technological advances are reshaping the construction equipment landscape. Machine control systems, particularly in road construction, have significantly improved efficiency and precision. Autonomous equipment has gained traction in mining, but broader adoption in general construction remains limited due to the unpredictable nature of jobsites.

“Electrification is another transformative trend,” Sleight indicated. “While China leads in integrating electric equipment into its mining sector, the focus in Europe and North America has been on compact machinery like mini excavators and small wheel loaders. These regions face practical challenges, including low utilisation rates and a lack of charging infrastructure on temporary jobsites. Nonetheless, the industry anticipates wider adoption over the next decade as costs decrease and infrastructure improves.”

Seizing opportunities

At the end of the day, Sleight recognised, government policies play a pivotal role in shaping construction equipment markets. “In emerging economies, infrastructure projects are often linked to commodity-driven revenues, creating cycles of investment and contraction. Developed markets, however, face different pressures, such as underinvestment in maintenance, which has led to high-profile failures like bridge collapses.”

He added, tariffs and trade tensions further complicate the landscape. “For example, anti-dumping investigations in Europe and North America have led to significant tariffs on Chinese-made equipment. And while these measures aim to address unfair trade practices, they also prompt manufacturers to adapt by relocating production to tariff-exempt regions, such as Mexico or India. This shift underscores the need for a localised approach to manufacturing and supply chains.”

All the while, sustainability is increasingly influencing market trends, particularly in mining and urban construction. “Companies with commitments to reducing carbon emissions are investing in electric fleets, aligning economic and environmental goals,” said Sleight. “And regulatory frameworks, such as zero-emission mandates in Norway and California (USA), are accelerating the shift toward sustainable practices. However, the pace of change remains slow, constrained by the lengthy legislative processes and the high upfront costs associated with new technologies.”

As a result, the construction equipment industry faces both macro and micro challenges, Sleight underscored. “Trade tensions, tariffs and the complexity of global supply chains create uncertainties, particularly for manufacturers dependent on international markets. The pandemic highlighted the fragility of these supply chains, prompting a re-evaluation of sourcing strategies to prioritise resilience over cost.”

Despite these challenges, however, Sleight is confident that opportunities abound. “Emerging markets offer higher growth rates, driven by urbanisation and infrastructure needs, while developed regions present stable, albeit slower, growth prospects, with an emphasis on modernisation and sustainability. Companies that balance a global footprint with localised operations are well-positioned to navigate these complexities.”

Modernisation being what it is, added Sleight, the global construction equipment market is at a crossroads within a transformative decade, influenced by regional disparities, technological advances and evolving regulatory environments. “As the industry adapts to shifting demands and priorities, understanding these dynamics is essential for global stakeholders aiming to thrive in a competitive and ever-changing landscape.

“It’s important to recognise that the construction equipment market always grows, despite its ups and downs. Companies must be prepared to navigate challenges and seize opportunities as they arise.”