The report finds that the sales of excavators as construction machinery were around 5.5x higher than its sales as that of forestry and agricultural equipment in 2018. Higher demand for excavators in the construction industry is mainly spurred by roads and highway projects, and the study remains bullish of the potential rise in the share of the construction industry in global sales of excavators in the coming future.
Over 70% volume share in markets
Excavators are commonly used in a wide range of sectors including construction, mining, agriculture, and forestry. However, according to the report, the construction industry is expected to hold the largest volume share; approximately 72% by the end of 2019. Manufacturers in the excavator market are focusing on introducing performance features that will suit the requirements of end-users from the construction industry to capitalise on the increasing demand for excavators as construction equipment.
Excavator market players are upgrading the design of excavators by incorporating advanced technologies to offer improved efficiency, which can help end-users to increase productivity and operators' safety.
Environmental regulations create challenges
Despite steady demand from the construction industry, stringent environmental regulation and high-quality standards for conventional excavators continue to create manufacturing challenges for market players.
Conventional excavators are subject to guidelines regulating the use and operation of heavy equipment. Manufacturers in the excavator market need to conform to these stringent regulatory requirements, which may add to the production cost, ultimately restricting manufacturers from maintaining competitive prices.
Profitable opportunities for market players
The fortunes of excavator manufacturers are closely linked to the broader macroeconomic policies, most notably investment in infrastructural development.
The Asia Pacific is home to two of the fastest growing economies in the world. Moreover, many small economies in the region are ramping up their archaic network of roads and highways, creating significant demand for heavy construction equipment.
Excavator manufacturers are likely to benefit from these broader developments in developing countries of Asia Pacific. The Fact.MR study finds that the APEJ region accounted for over 47% volume share in the excavator market in 2018, and projects that the region will continue to create lucrative sales opportunities for excavator market players in the upcoming years.
According to the report, the high cost of excavators continues to induce a preference for renting. As excavators are cost-sensitive, renting continues to be a feasible option, especially in micro projects.
The study foresees the excavator market to record an average volume CAGR of over 3.2% for the period between 2018 and 2026.