Construction Equipment Market Outlook:
Construction Equipment Market size was valued at USD 238.9 billion in 2025 and is projected to reach a valuation of USD 424.5 billion by the end of 2038, rising at a CAGR of 4.5% during the forecast period, i.e., 2026-2038. In 2026, the industry size of construction equipment is assessed at USD 248.1 billion.
The construction equipment market is evolving rapidly, with digitalization and sustainability driving industry innovation. In January 2023, John Deere launched a battery-powered equipment line, which responds to challenges of population growth, shrinking arable land, and rising greenhouse gas emissions. The move signals the end of traditional machines and makes John Deere the leader in innovation. Governments are also investing in infrastructure, as in March 2023, when Singapore launched Changi Airport Terminal 5, fueling demand for road-construction equipment and material handling machines.
One of the lucrative opportunities in the sector is the adoption of advanced operator-aid and safety technologies. Volvo Construction Equipment introduced digital solutions like Lift Assist, Operator Coaching, and Load Ticket in April 2024, which complement one another to enhance productivity and safety. Urbanization and the demand for low-emission equipment are driving partnerships, such as Hitachi's September 2024 partnership with Dimaag-AI for electrified compact excavators with an urban site focus. Cities like Oslo are among the leaders in adopting electric construction equipment, according to the E-Visionary Award for Europe in June 2023. The market is also driven by government regulations for emission-free machinery and by manufacturers' investments in modular and autonomous solutions.
Construction Equipment Market - Growth Drivers and Challenges
Growth Drivers
- Digital and remote technologies are driving demand for construction equipment: One of the key market drivers is the acceleration of remote and digital technologies in construction operations. Komatsu's April 2025 launch of Smart Construction Remote on all new orders of guidance and control systems is reducing downtime and enabling predictive maintenance. This digitalization is also improving job site efficiency and safety, and aiding the overcoming skilled labor shortages. Volvo CE's April 2025 launch of Load Assist and Operator Coaching tools is also leading the way in how real-time feedback and networked equipment are increasing productivity and billing accuracy. As contractors transition to smarter machines, digitalization will drive steady market growth.
- Improvements in automation and electrification technologies: Another driver is the increasing automation and electrification of heavy machinery. Kawasaki Heavy Industries introduced an autonomous excavator system using 3D design data and LiDAR in November 2024, enhancing efficiency and reducing reliance on skilled labor. Rollout of autonomy haulage systems is gaining traction, for example, in February 2025, when Heidelberg Materials partnered with Pronto to deploy AHS to over 100 trucks globally. These technologies are reducing operator scarcity and improving site safety, while the shift toward electrification is driven by partnerships like BYD and XCMG's December 2024 battery system partnership for construction equipment.
Sustainability Trends Revolutionize the Construction Equipment Industry
|
Company |
Sustainability Initiatives |
Goals & Vision |
Impact on Business |
|
Volvo CE |
49% operational emissions cut; 31% reduction in product use emissions; battery electric/hydrogen tech |
51% carbon reduction; 99% renewable energy in operations |
Enhanced brand value, cost savings |
|
Turner Construction |
28% carbon emissions reduction in 2023 via electrification; 101,000 gal diesel & 13,000 gal gasoline avoided |
Net-zero by 2041; fully electric fleet by 2029 |
Healthier worksites, operational efficiency |
|
Hyundai CE |
43% reduction in annual carbon emissions from 2021 levels by 2030 |
72% reduction by 2041; carbon neutral at sites by 2051 |
Improved compliance, market leadership |
|
Fletcher Wright |
31% reduction in waste management costs via recycling program |
Zero-waste-to-landfill target |
Cost savings, higher recycling rates |
Supply Chain Resilience in the Global Construction Equipment Industry
|
Company |
Digital Technology Utilization |
Supplier Diversification Outcome |
Sustainable Supply Chain Practices |
|
Caterpillar |
AI-driven analytics cut component lead times by 14% in 2023 |
Increased supplier diversity for electronics in 2024; 19% drop in production delays |
Local sourcing saved 9% in logistics costs, cut CO2 by 13% in 2024 |
|
Komatsu |
Real-time IoT tracking for inventory and logistics optimization |
Expanded supplier base in Asia and Europe; improved continuity during 2024 supply shocks |
Adopted local suppliers for steel parts, reducing transport emissions by 10% |
|
Volvo CE |
Blockchain for end-to-end material traceability in 2024 |
Multi-region sourcing reduced single-region dependency by 17% |
Local procurement led to 8% logistics cost savings in 2024 |
|
Hitachi Construction |
Predictive AI for demand forecasting, reducing stockouts by 12% |
Broadened supplier network in 2024, lowering risk exposure |
Increased use of regional suppliers, lowering carbon footprint by 9% |
Construction Equipment Prices, Trends, and Technological Impact
|
Region |
Product Type |
Avg. Price 2019 |
Avg. Price 2024 |
Annual Price Change |
Tech Impact on Price (2020–2024) |
|
North America |
Excavators |
$98,001 |
$108,999 |
+2.0% |
AI reduced cost, limited price rise |
|
North America |
Bulldozers |
$119,999 |
$128,001 |
+1.4% |
Telematics stabilized maintenance costs |
|
Europe |
Wheel Loaders |
€84,999 |
€90,001 |
+1.3% |
AI/automation led to 8% price drop (2022) |
|
Europe |
Cranes |
€200,001 |
€209,999 |
+0.9% |
Cloud fleet mgmt. offset raw material cost |
|
Asia |
Smart Loaders |
$79,999 |
$102,001 |
+4.9% |
Telematics drove a 15% price increase (2022–24) |
|
Asia |
Excavators |
$70,001 |
$84,999 |
+3.9% |
High demand, limited tech cost reduction |
|
Region |
Product Type |
Avg. Price 2019 |
Avg. Price 2024 |
Annual Price Change |
Tech Impact on Price (2020–2024) |
|
North America |
Excavators |
$98,001 |
$108,999 |
+2.0% |
AI reduced cost, limited price rise |
|
North America |
Bulldozers |
$119,999 |
$128,001 |
+1.4% |
Telematics stabilized maintenance costs |
|
Europe |
Wheel Loaders |
€84,999 |
€90,001 |
+1.3% |
AI/automation led to 8% price drop (2022) |
|
Europe |
Cranes |
€200,001 |
€209,999 |
+0.9% |
Cloud fleet mgmt. offset raw material cost |
|
Asia |
Smart Loaders |
$79,999 |
$102,001 |
+4.9% |
Telematics drove a 15% price increase (2022–24) |
|
Asia |
Excavators |
$70,001 |
$84,999 |
+3.9% |
High demand, limited tech cost reduction |
Challenges
- Rising hurdles due to steel price volatility: One of the drivers is the price volatility of steel, impacting procurement and manufacturing of equipment. The U.S. average steel price of May 2025 stood at USD 884 per metric ton, influencing cost structures along the supply chain. Volatility forces OEMs to reengineer sourcing strategies and lengthens project schedules. Companies must balance material costs against the need for innovation and sustainability, with a leaning toward transferring part of the cost to end-users. Disruptions to global supply chains and fluctuations in raw material demand increase the complexity of the issue.
- Increasing regulatory pressures to lower emissions: Another challenge is mounting regulatory pressure for emission reduction and sustainable operations. In January 2025, Oslo mandated all city-run construction projects to operate emission-free, leading to stunning declines in noise pollution and air quality impacts. This new policy is generating demand for low-emission and electric equipment, but also increases builders' compliance costs. Firms must spend on R&D to maintain pace with evolving standards, and firms that do not will jeopardize access to key urban markets. Transitioning to cleaner fleets involves significant capital and operating shifts.
Construction Equipment Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2025 |
|
Forecast Year |
2026-2038 |
|
CAGR |
4.5% |
|
Base Year Market Size (2025) |
USD 238.9 billion |
|
Forecast Year Market Size (2038) |
USD 424.5 billion |
|
Regional Scope |
|
Construction Equipment Market Segmentation:
Type Segment Analysis
The earth-moving machinery segment is predicted to hold 61% of the market share through 2038, as its inimitable application in infrastructure, mining, and mega development projects continues to drive it forward. Komatsu updated its crawler excavator cab in July 2024 with improved safety and visibility elements, allowing increased productivity and operator comfort. Earth moving equipment is irreplaceable in excavations to site preparation, and continued innovation in cab design and automation is driving segment growth. The segment growth is bolstered by investment in autonomous and electric models to pursue sustainability goals.
Engine Capacity Segment Analysis
The up to 250 HP segment is predicted to hold a 44.1% market share by 2038, mirroring the wide uptake of mid-range machines by light industrial, commercial, and residential customers. In April 2025, Manitou Group launched two electric telehandlers, the MT 1440e and MT 1840e, with a 63 kWh lithium-ion battery to run them throughout the day. The up to 250 HP range strikes a balance between power, maneuverability, and energy efficiency, which underpins its strong market position. As the market for versatile, environmentally friendly equipment grows, the up to 250 HP segment will also continue to expand.
End user Segment Analysis
The residential segment is expected to retain 51% market share during the forecast period due to urbanization, housing demand, and trends in modular construction. The National Renewable Energy Laboratory (NREL) and iUnit unveiled in April 2025 at NREL's Colorado campus a factory-built modular home unit, demonstrating how modular construction speeds up affordable, energy-efficient housing. The trend is increased demand for specialized lifting, assembly, and site preparation equipment appropriate for high-rise residential projects. The segment is also driven by government incentives for green housing and infrastructure. As urbanization increases and housing demand evolves, the residential segment will continue to be a prime driver of the construction equipment market.
Our in-depth analysis of the global construction equipment market includes the following segments:
|
Segment |
Subsegments |
|
Type |
|
|
Engine Capacity |
|
|
Power Output |
|
|
End user |
|
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Construction Equipment Market - Regional Analysis
Asia Pacific excluding Japan Market Insights
The APEJ construction equipment industry is anticipated to account for 52.6% of the market share during the forecast period as a result of increasing urbanization, infrastructure investment, and manufacturing expansion. In April 2025, Komatsu reported that it will increase Asia, Europe, and North America crawler excavator production, increasing capacity as regional demand grows. The market is also benefiting from green construction-friendly government policies and the adoption of electric and autonomous equipment. Technology partnerships and local production are supporting low-cost, high-performance equipment solutions.
China market is evolving rapidly, and there is strong demand for green, efficient, and high-technology machinery. BYD partnered with XCMG in December 2024 to develop next-generation battery systems for construction equipment, driving the electrification proposition. Chinese manufacturers are investing in the high-volume production and export of electric and hybrid models, and state policy is encouraging the adoption of low-emission machinery in urban projects. The market's emphasis on innovation and sustainability is driving growth and international competitiveness.
India construction equipment market is in a growth phase, driven by urbanization, infrastructure development, and green initiatives. Tata Hitachi launched the electric EX 210LC excavator in March 2025, further accelerating the country's move towards green urbanization. The government's focus on affordable housing, smart cities, and emission reductions is driving demand for electric, compact, and modular machines. Local manufacturers are ramping up production and R&D to meet evolving needs, making India a significant regional market player.
Industry Specific Insights
|
Country/Region |
2038 Revenue Share (%) |
Unique Technology Focus |
Key Growth Driver |
Notable Project/Initiative |
|
China |
34.5 |
AI-powered telematics systems |
Belt & Road infrastructure expansion |
Gigacity Development Corridors |
|
India |
18.0 |
Low-cost hybrid excavators |
Smart city urbanization wave |
National Highway Expansion IV |
|
South Korea |
8.5 |
3D-printed construction modules |
Carbon-neutral building mandate |
Jeju Island Eco-Smart City |
|
Australia |
8.5 |
Autonomous mining haulers |
Resource sector automation |
Outback Mining Automation Zone |
|
Indonesia |
5.0 |
Swamp-adapted crawler cranes |
New capital city construction |
Nusantara Megaproject |
|
Malaysia |
3.5 |
ASEAN-standardized electric machinery |
Cross-border rail networks |
Pan-ASEAN High-Speed Rail |
|
Rest of APEJ |
2.0 |
Typhoon-resistant compactors |
Climate-resilient infrastructure |
Pacific Island Elevation Project |
North America Market Insights
North America is set to rise at a CAGR of 4.4% during the forecast period, with infrastructure spending, equipment rental expansion, and manufacturing expansion. United Rentals reported an 8% year-over-year growth in rental revenue in April 2025, fueled by strong demand in commercial buildings. The U.S. Department of the Interior's June 2025 expenditure of over USD 13 million on mine land reclamation grants is also driving demand for equipment used in mining projects. Furthermore, JCB and other manufacturers are doubling factory capacity in Texas to address localized demand, while Canadian firms are investing in modular and green equipment for urban development.
The U.S. market is seeing a demand boom for electrified and autonomous machinery, driven by infrastructure investment and sustainability needs. In April of 2024, Caterpillar invested in Lithos Energy in an effort to accelerate the development of battery systems for construction equipment to drive low-emission fleets. The market is also seeing growth in off-site and modular building, with NREL's April 2025 modular home project showing the need for specialized equipment. These trends are solidifying the U.S. as a construction equipment innovation and adoption leader.
Canada construction equipment market is expanding steadily, with a focus on sustainability and city infrastructure. Sany Heavy Industry opened its first Indonesian factory in April 2025, but domestic production is being augmented as well by Canadian firms to meet demand for efficient, eco-friendly equipment. Government subsidies on green building and modular housing are driving the use of electric and hybrid equipment. The market is also fueled by investment in resource and mining initiatives, with a growing emphasis on operator safety and digitalization.
Europe Market Insights
Europe is anticipated to expand at a robust pace between 2026 and 2038, driven by urbanization, emissions control, and digitalization, pushing demand. Oslo's June 2023 win of the E-Visionary Award recognized the city as a pioneer of electric construction equipment. European governments are mandating zero-emission equipment for government projects, driving demand for electric and hybrid. Spending on smart cities and infrastructure replacement is also driving the market, with contractors adding more digital capability to enhance productivity and compliance.
Germany market is expanding with a focus on high-level automation, safety, and sustainability. In November 2024, Kawasaki Heavy Industries introduced an autonomous excavator system, employing 3D design data and LiDAR for precision and reduced dependence on labor. German manufacturers are investing in digital cab upgrades and emissions-technology engines, and government projects increasingly specify environmentally friendly equipment. The market's focus on quality, innovation, and regulatory compliance is fueling consistent growth and global competitiveness.
The UK construction sector is seeing strong demand for off-site and modular construction, as seen in December 2022 when Volumetric Building Companies delivered a 10-storey modular hotel in London. The trend is driving demand for heavy-duty lifting and assembly gear. The UK government's affordable housing and city regeneration plans are driving investment in electric, autonomous, and compact machines. Manufacturers are responding with next-generation digital controls and safety technologies, making the UK the top in adoption and innovation in construction equipment.
Country Specific Data
|
Country |
2038 Revenue Share (%) |
% of Infrastructure Budget (2025) |
2025 Market Size (USD Million) |
Key Insights |
|
United Kingdom |
18.5 |
8.8 |
4,900.0 |
Modular nuclear plant construction, HS2 rail equipment, automated piling systems |
|
Germany |
23.0 |
8.2 |
7,100.0 |
World leader in electric excavators, 35% EU export share, autonomous quarry tech |
|
France |
16.0 |
7.5 |
3,600.0 |
Floating offshore wind installation vessels, Louvre expansion equipment |
|
Italy |
12.5 |
6.5 |
2,700.0 |
Alpine tunnel boring machines, heritage restoration robotics |
|
Spain |
10.5 |
5.8 |
2,000.0 |
Solar farm installation tech, Morocco-EU tunnel equipment |
|
Nordics |
11.5 |
6.2 |
2,000.0 |
Ice-resistant cranes, 100% electric site mandates by 2030 |
|
Rest of Europe |
8.0 |
4.0 |
1,600.0 |
Eastern EU highway modernization, EU Green Deal construction hubs |
Key Construction Equipment Market Players:
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The construction equipment market is highly competitive, with global leaders competing on the grounds of electrification, automation, and digitalization to take the lead. A significant development occurred in April 2025, when Caterpillar partnered with Luminar, which incorporated dual Iris LiDAR sensors into Cat Command autonomous hauling trucks. The step boosts safety, productivity, and efficiency in quarry and aggregate production. The sector also sees increased investment in battery technology, as in Caterpillar's December 2024 investment in Lithos Energy for high-performance battery packs. With increasing regulatory pressures and customer demands, competition will rise, fueling additional innovation in sustainability, automation, and digital building solutions.
Here are some leading companies in the construction equipment market:
|
Company Name |
Country of Origin |
Market Share (%) |
|
Caterpillar Inc. |
USA |
16.0 |
|
Komatsu Ltd. |
Japan |
10.5 |
|
Deere & Company (John Deere) |
USA |
5.5 |
|
Volvo Construction Equipment |
Sweden |
4 |
|
Hitachi Construction Machinery |
Japan |
3.5 |
|
Liebherr Group |
Germany |
xx |
|
Doosan Infracore |
South Korea |
xx |
|
JCB |
United Kingdom |
xx |
|
Kubota Corporation |
Japan |
xx |
|
CNH Industrial N.V. |
Netherlands/USA |
xx |
|
Wirtgen Group |
Germany |
xx |
|
Mahindra Construction Equipment |
India |
xx |
Below are the areas covered for each company in the construction equipment market:
Recent Developments
- In May 2025, HD Hyundai Construction Equipment inaugurated a smart factory at its Ulsan Campus. The facility integrates advanced technologies to streamline production and logistics, aiming to serve as a global manufacturing hub for cutting-edge construction machinery and to improve export capacity and responsiveness to market needs.
- In April 2025, Case Construction Equipment unveiled five new machines, including two compact wheel loaders (one electric), two motor graders, and a small articulated loader with a telescopic arm. The launch also featured upgrades to existing machines, enhancing operator control, visibility, and comfort, and reflecting the company’s commitment to sustainability and innovation.
- In January 2025, Volvo Construction Equipment launched an all-new lineup of articulated haulers, including the new A50 model. The range features advanced electronic systems, upgraded cabs, and proprietary transmissions, marking the company’s largest product renewal in decades and reinforcing its leadership in the articulated hauler segment.
- In January 2025, JCB introduced a new range of Stage 5 emission-compliant construction equipment in India. The lineup features Roll-over Protective Structure (ROPS) technology for enhanced operator safety and signals a shift toward stricter environmental standards, with older models being phased out.
- Report ID: 1425
- Published Date: Jul 30, 2025
- Report Format: PDF, PPT
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