Demand in Latin America for heavy construction equipment is expected to continue growing - Allied Market Research reports
Latin America is set to see strong growth in demand for construction machines. This is according to a new report published by Allied Market Research, called Latin America Heavy Construction Equipment Market by Equipment, Application, and End User: Opportunity Analysis and Industry Forecast, 2014-2022. The report shows that the market size for Latin America’s off-highway equipment sector was valued at US$4.31 billion in 2016, and is projected to reach $6.391 billion by 2022, growing at a CAGR of 6.8% from 2016 to 2022. The construction segment accounted for the dominant share of total heavy construction equipment market in 2016.
The off-highway equipment sector covers heavy-duty machines, designed for use in various construction operations such as drilling, hauling, excavating, paving, and grading. The market players in the Latin America heavy construction equipment industry aim their products at various end-user industries including manufacturing, oil and gas, forestry, mining, construction, and infrastructure. Heavy construction equipment manufacturers focus on designing high-quality products that have high-performance and efficiency. The prominent players have introduced advanced heavy construction equipment which meet the respective government requirements while also meeting the needs of end users.
The key factors that drive the market in Latin America for off-highway machines include the recovery of the construction sector, a surge in public-private partnerships, and rapid urbanisation. However, the report explains that Latin America’s heavy construction equipment market growth is being held back by the increase in carbon footprint, a shift in oil prices, and weaker economic conditions in countries such as Brazil and Argentina.
The demand for heavy construction equipment has increased within the region, particularly in Colombia and Chile, owing to rapid urbanisation and a heavy investment in infrastructure development. Both Colombia and Chile have embarked on major road and highway construction programmes, as well as instigating projects for massive new tunnels and bridges. In addition, key market players, such as Caterpillar, Komatsu and Volvo CE are working on developing more efficient earthmoving machines that will help reduce carbon emissions and improve performance.
The Latin America heavy construction equipment market is segmented based on equipment type, application, end user, and country. In 2016, the earthmoving equipment segment dominated the Latin America heavy construction equipment market, with 48.5% share, followed by the material handling equipment segment. This is attributed to the plummeting operational costs with the advent of the latest generation of more efficient excavators. At the same time, the market is driven by proactive initiatives by national governments to develop industrial and commercial sectors.
In 2016, excavation and demolition applications dominated the market, and these sectors are expected to grow at a CAGR of 6.5%. Excavators, cranes, and dozers are major items of equipment used for both excavation and demolition activities. The heavy lifting application is expected to grow at the highest CAGR of 7.4% from 2016 to 2022.
The construction industry is the major end-user industry for heavy off-highway equipment in Latin America, accounting for 34% in 2016. Equipment such as excavators, loaders, graders, backhoe, cranes, dumpers, and tippers are utilised for large-scale construction activities. Manufacturers are continuously designing advanced products with advanced technology and increased performance. The manufacturing segment is expected to grow at the highest CAGR of 8.4% to reach $671 million by 2022.
Key findings of the Latin America Heavy Construction Equipment Market reveal that the material handling equipment is expected to grow at the highest CAGR of 8.2% from 2016 to 2022.
In addition, the tunnelling application segment was valued at $743 million in 2016. And Brazil’s heavy construction equipment market is expected to grow at a CAGR of 5.5%. However Chile is the fastest growing market among all the Latin American countries.
The key companies profiled in the report include
