According to a report from ReportBuyer, the construction equipment market is projected to grow at a CAGR of 4.52% and reach a market size of $199.18 billion by 2025 from an estimated market size of $146.17 billion in 2018. Increasing investment in infrastructure, coupled with the rising demand for smart city projects is expected to fuel the demand for construction equipment. Other major factors driving the growth of this market include growing population, rapid urbanization, increasing construction activities and incorporation of new technologies in equipment.

Tier-5 emission regulation is expected to drive the construction equipment market as well. Tier-5 compliant engines are projected to have the largest market share of construction equipment by emission regulation in 2025. Countries in North America such as Canada, the U.S. and Mexico are speculated to have enforced these regulations by 2025.

Additionally, it is speculated that Japan will also follow these regulations once they are in effect. With the increasing focus on reducing emission from fossil fuels, regional emission regulation will have a significant impact on the construction equipment market.

The Selective Catalytic Reduction (SCR) aftertreatment device segment is projected to grow at the fastest CAGR during the forecast period. This growth can be attributed to the stringent emission regulation standards that are speculated to be in Asia Pacific, Europe and North America during the forecast period.

Asia Pacific is estimated to dominate the construction equipment market and is projected to be the largest market during the forecast period. This growth can be attributed to the improving socio-economic conditions in emerging economies such as China, India, Indonesia and Thailand.

The sizable population in countries such as China and India have resulted in an increased number of government projects such as airports, sewer systems and renewable energy projects. The Middle East region is estimated to dominate the construction equipment market and is projected to grow at the highest CAGR during the forecast period. This growth can be attributed to the increasing infrastructure spending in this region. Saudi Arabia plans to reduce its dependence on the crude oil sector for revenue in its Vision 2030.