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The production of heavy machinery such as the ones used in the construction industry is a market with a high entry barrier. In order to maintain operations, being able to innovate, and stay ahead of competitors, a high level of investments in the equipment and facilities are required, as well as facing other expenses from the energy use and the salaries of employees. Because of that, the largest construction machinery manufacturers tend to be very established, as it is a difficult market to disrupt into. The companies with the largest market share tend to come from key markets such as the United States, China, Japan, and some Western European countries. In addition, many of them are also among the leading heavy equipment manufacturers overall, as they also produce equipment for farming, mining, forestry, defense, or the automobile industry, among others.Size of the construction and construction equipment markets
The construction industry is a massive industry, with the construction output in China alone amounting to over 31 trillion yuan in 2022, which equated to approximately 4.64 trillion U.S. dollars. The market size of manufacturing, selling, and renting equipment for construction depends significantly on the development of the construction industry itself. Thus, it is important to observe what has been the development of construction output in the largest markets. For example, construction spending in the U.S. is forecast to decrease in 2024 and 2025, only to start recovering in the years after that. That could hurt the revenue of the construction equipment manufacturers with a strong presence in the country.
