According to Grand View Research, the global construction equipment market size is projected to reach $208.36 billion by 2020, growing at a CAGR of over 5% from 2014 to 2020.

Rapid infrastructural growth along with urbanization is expected to drive industry growth over the forecast period. Further, increasing investments from government in the infrastructural sector and growing application of the advanced technology in operations including material handling, excavation and earth moving are expected to drive demand.

Growing impetus for developing infrastructure has triggered the demand for rental products combined with cost-competitive OEMs in the developing markets of Asia Pacific is estimated to offer prominent opportunities for industry growth over the forecast period. However, unstable economic conditions and high initial costs are expected to hinder revenue by 2020.

The industry can be classified by products into concrete and road construction equipment, material handling machinery and earth moving machinery. The material handling segment is projected to grow at the fastest CAGR of 5.7% by 2020. This surge in demand can be attributed to growth in application areas and rise in the automation industry.

The Asia Pacific construction equipment market accounted for over 50% of the overall share in 2013 and is expected to grow at a CAGR of 5.8% from 2014 to 2020. Varied favorable government policies along with infrastructural developments in service sector and IT industry have triggered equipment usage in countries such as India.

Growing penetration of Chinese machinery in the premium products industry is projected to challenge key existing vendors including Caterpillar and Komatsu. Growing urban population in regions such as North America and Europe is expected to offer considerable growth opportunities for the industry.