China Construction Equipment Market Size

China Construction Equipment Market Analysis

Currently, the Chinese construction equipment market is valued at USD 50 billion. It is expected to reach USD 68 billion, registering a CAGR of 5.55% over the next five years.

The COVID-19 pandemic severely impacted the construction industry in China. The construction industry in China registered a decline of 6.9% during the first quarter of 2020. The manufacturing sector in China is a major consumer of construction equipment like wheel loaders and cranes. However, Purchasing Managers Index (PMI) fell to 49.4, indicating an economic slowdown since a PMI under 50 is considered to be a major sign of economic contraction in China. The disruptions in supply chain activities, the interruption in large-scale manufacturing, restrictions on travel, and the declining sales of equipment, are responsible for the declining growth of the market. The rise in construction across the country is observed after the pandemic due to the easing of restrictions in the country. The market is expected to cope with all the losses that happened during the pandemic and grow at a certain pace. . Furthermore, the manufacturers are implementing contingency plans to mitigate future business uncertainties to retain continuity with clients in the critical sectors of the construction equipment industry. For instance,

• In 2020, Sany Heavy Industry increased its R&D investments to USD 954 million an increase of 33.2 % over 2019 and the number of R&D employees reached 5436 a 69% increase over 2019. Thus Sany Heavy Industry was able to luanch new innovative products like super-large excavators SY870, SY980 and SY1250, new-generation product line of intelligent excavators and 4000 t crawler crane SCC40000A which helped the company to arrest the decline in sales during the COVID-19 pandemic.

Over the long term, the increasing focus on infrastructure, the development of automation in the construction and manufacturing processes, and the introduction of electric construction equipment like elctric excavators is expected to have a significant impact on the growth of the market studied. The road construction machinery market witnessed a substantial increase in the due to the increased road development programs undertaken, such as the Belt and Road Initiative.

Besides being the largest manufacturer of construction equipment globally, China is the largest market for construction machinery in the world. Rural construction activities, rapid urbanization, and the growth in public-private partnerships drove the demand for construction equipment. China also has one of the best construction machinery supply chains in the world, with all parts of the supply chain being in China.

Renting and leasing construction machinery is on the rise. Buying new equipment involves high cost, maintenance, and storage-related issues. Renting is becoming a viable possibility for newer businesses as well. In fact, for short-term construction applications, renting machinery has been preferable to an original purchase among construction contractors, as renting allows optimum utilization of the machinery.

Key payers are expanding their manufacturing capacity and launching new products to cater to the increased demand for construction equipmnet. For instance

• In February, 2022, Sany Heavy Industry unveiled new SY2600E 300 t class electric-drive hydraulic front shovel to be produced at its Suzhou plant in China. The SY2600E is 15 m long and 8 m high, and it has a bucket capacity of 15 cubic metres. It is powered by an electric drive consisting having fully electronic control system with eight pumps and three valves. The excavator is specifically designed for heavy duty mining applications.
• In October, 2022, XCMG Port Machinery started operations at their new plant in Xuzhou, China. The new plant produces container reach stackers, forklifts, and other mobile port machinery and gantry cranes, shore bridge and other large port machinery with an annual capacity of 2000 units.

Based on the aforementioned factors the market for construction equipmnet in China is anticipated to grow at a decent CAGR over the next five years.