Worldwide demand for heavy construction equipment is projected to rise 5.4 percent annually through 2009 to $106 billion.
Growth will be supported by the expected continued expansion of emerging markets. with high points including Eastern Europe, India and China. Within the Triad (North America, Japan and Western Europe), North America is expected to maintain its lead in terms of both the overall size of demand and growth potential, as the growth prospects for Japan and Western Europe will be hampered by a combination of negative demographic and structural trends, including aging populations and high levels of regulation and taxation. These and other trends are presented in “World Heavy Construction Equipment,” a new study from The Freedonia Group Inc., a Cleveland-based industrial market research firm.
Future prospects remain very favorable in China, despite the recent weakening of the construction equipment market due to tightening credit policies.
Construction equipment demand will continue to benefit from China’s aggressive industrialization efforts. While strong equipment demand is usually foreshadowed by a combination of elements including favorable demographics and burgeoning GDP performance.
Eastern Europe is a somewhat different story, as the region’s population is forecast to decline. However, based on the economic turnarounds experienced by other countries joining the EU, expected infrastructure and economic improvements should help to strongly increase construction equipment demand in the region.
Within the Triad, 2004 was a year of recovery and growth for North America, where expansion in heavy construction equipment demand was driven by the explosive U.S. real estate market. Most competitors saw sales and operating profits improve after years of stagnation. Future growth is expected to remain healthy in the region.