According to a ReportBuyer SWOT analysis, the global construction equipment market has made an effective comeback after a significant downturn spanning multiple years.

Demand levels for 2017 and H1/2018 saw strong growth globally with resurgence experienced across most key markets, an uptick in construction activity, a world economy gaining traction, the return of Chinese spending on infrastructure development projects after an extended hiatus and an uptick in the energy sector activity post recovery as global crude oil prices returned to their regular levels and energy commodity prices projected to increase by 20% year on year in 2018. Base metal prices, too, are projected to register an increase in 2018 which is likely to provide a boost to mining activity.

The U.S. market for construction equipment has been buoyed by continued strong demand and activity levels with the economy on solid footing. The industry has witnessed strong housing starts as of late along with a spurt in non-residential construction activity, along with favorable regulatory and policy environment buoying further demand for new equipment. Construction activity is projected to pick up further momentum in H2/2018 with industry optimism and confidence at record high levels. However, rising operational costs with increasing input, wage costs and limited availability of skilled construction workforce remain key concern areas going forward.

European markets, too, have been on a steady growth path over the recent years, with the EU economy led by strong construction activity, improving business scenarios across mining and quarrying sectors and an overall favorable low interest rate environment.

The Chinese market made a quick turnaround in 2017 after a five-year downswing, with massive year-on-year increase in sales of excavators and wheel loaders led by China’s infrastructure development projects in second rung cities and increasing urbanization. Further, China’s plan to revive the ancient silk trade routes under its One Belt One Road initiative involve planned spending outlays of around $1 trillion and is likely to provide a further, significant boost to sales of construction equipment within China going forward.

OEMs are busy ramping up their production rate at war footage to minimize demand/supply gaps across dealer networks, given the low inventory levels and production rates maintained by the industry over the past couple of years as demand levels remained dismal. OEMs are also renewing product portfolios in alignment with the market upturn through new product introductions. The wave of a set of key disruptive technologies – clubbed under the gamut of CASE (Connected, Automated, Shared and Services and Electric) – are finding their way into the construction equipment domain as well. Industry OEMs continue to make significant progress towards technological incorporation into product portfolios and services.

However, uncertainties like Brexit and the onset of a global trade war could pose a serious threat to the ameliorating world economy, taking it to the brink of another potential economic recession. However, long term growth avenues, like the proposed cumulative $1 trillion infrastructure development bill for repair and rebuilding in the U.S., are likely to have tremendous potential for the industry over medium term once it gets the requisite approvals from Congressional leaders.