According to the Technavio research analysts, the global construction machinery market is expected to grow by nearly 12 percent by 2020. The Technavio report groups the construction machinery into four segments, material handling machinery, earthmoving machinery, concrete and road construction machinery, and other construction machinery. The earthmoving machinery accounted for 44 percent of the market share.
A Technavio industry expert, Navin Rajendra, said, “With the growth of the global economy, countries worldwide are investing in the development of high-quality infrastructure, especially in the construction of airports and mass transit systems, which will boost the construction machinery market.”
There are four drivers boosting the global construction machinery market. These are highlighted in the report:
- Increased investment in real estate
- Emergence of Smart cities
- Rapid urbanization
- Vertical growth in the global construction market
Vertical Growth In Cities
Ultra-high-rise buildings and skyscrapers are being built in medium and large-sized cities across the globe. Not only do these building structures attract popular foreign and domestic enterprises, but also act as landmarks for the local community. These large construction projects will increase the demand for construction machinery globally.
High-rise buildings under construction in Europe grew to 71 towers in 2015, from 46 towers in 2014, a 56 percent growth increase. The building construction projects increasing across the globe will increase the demand for construction machinery.
More people living in rural areas are relocating to urban areas in search of better employment opportunities. This is partly contributed to multinational corporations setting up offices in cities worldwide. Urban population accounted for 54 percent of the total population in 2015. This percentage is expected to increase significantly especially in Asia, Africa and the Caribbean by 2050.
India, Qatar and Saudi Arabia governments are investing a lot of money in the development of Smart Cities. Homebuyers are attracted to Smart Cities, because they provide smart grids, improved healthcare and transportation facilities, enhanced traffic management system and advanced technologies.
With the emergence of Smart Cities, there will be an increased demand in construction machinery by 2020.
Increased Investment In Real Estate
Low interest rates are driving real estate investment in many regions. The recovery of the global macro-economic environment is also a contributor. Real estate spending in Europe is high, especially in Dublin, Hamburg and Berlin, which are classified as Tier-2 cities. In the United States, Austin and Dallas, Texas are growing at a rapid pace. In 2015, many North American investors increased their property acquisitions. This is mainly contributed to the competitive investment environment.
With the increased investments in the real estate market, there will definitely be an increased demand in construction machinery by 2020.
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