The global construction equipment rental market size is estimated to grow by $31.46 billion from 2023 to 2027, according to Technavio. This growth is expected to occur at a compound annual growth rate (CAGR) of over 5.17% during the forecast period.
Key Trends Fueling Growth
- Increasing in adoption of automation:
- The construction industry is seeing a big change with the introduction of automated machines and self-driving vehicles. These machines work better than manual ones and are becoming more popular. Automated guided vehicles (AGVs) are especially liked because they can figure out the best route to move goods efficiently.
- Although traffic controllers still assign tasks and manage load movement, AGVs now use computer-aided design (CAD) systems to guide them. This helps them find the quickest path for delivering or collecting goods.
- AGVs also help with navigating around obstacles and adjusting routes in real-time. CAD-based software programs in AGVs map out all possible paths and show where to pick up and drop off goods. With more automation, the market for rental equipment is expected to grow in the coming years.
Major Challenges
- Lack of workforce in construction industry
- Industries like construction are facing a workforce shortage, particularly skilled workers like technicians and site managers. This shortage, noted globally including regions like APAC, Europe and South America, leads to missed opportunities and growth risks. Companies struggle to fulfill orders due to the lack of skilled personnel, hindering the industry’s progress.
- Attempts to address this, such as hiring immigrants, encounter challenges like language barriers and skill mismatches. Some firms invest in training programs for migrants, but regulatory uncertainties delay their recruitment.
- Small and medium-sized enterprises (SMEs) are especially affected as they await approvals for migrant employment. These factors are anticipated to impede the expansion of the global construction equipment rental market in the coming years.
The infrastructure sector, both government and private, is witnessing increased investment, offering ample growth opportunities for companies in earthmoving equipment rental. Valued at $77.01 billion in 2017, the ECRCE segment has shown continuous growth until 2021. Urbanization, particularly in developing nations, is rapidly increasing, leading to the emergence of megacities—urban areas with over 10 million inhabitants.
This migration from rural to urban areas indicates rising disposable incomes. Consequently, cities are expanding to accommodate the growing populace, necessitating construction of roads, railways, residential complexes, hospitals and hotels. Such developments drive construction activities and boost infrastructure demand, fueling the need for construction machinery in the forecast period.
