Construction Equipment Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Construction Equipment Market Trends and Insights

Mega-infrastructure Pipelines Across Asia driving Over USD 2 tn Annual Equipment Demand

A committed project pipeline exceeding USD 3.7 trillion is transforming allocation priorities, pulling large dozers, 45-ton excavators, and high-capacity concrete pumps into Asian depots ahead of other regions. Saudi Arabia alone awarded USD 55 billion in projects in 2024, a 57% jump year-on-year, while the UAE lifted awards by 200% to USD 34 billion. OEMs are tailoring sales mixes toward higher horsepower and longer-reach booms, anchoring revenue in the construction equipment market through larger ticket sizes and aftermarket contracts.

U.S. IRA and CHIPS Acts Accelerating Earth-Moving Purchases for On-shoring Projects

Federal incentives for semiconductor fabs, EV plants, and grid upgrades have created a structural pull for 250-500 HP dozers and excavators across the Sun Belt. The American Society of Civil Engineers identifies a USD 3.7 trillion infrastructure gap by 2035, ensuring sustained visibility for OEM order books^{[1]“A Comprehensive Assessment of America’s Infrastructure 2025,” American Society of Civil Engineers, infrastructurereportcard.org}. Contractors, faced with labor constraints, are leaning toward larger units that compress project schedules and ease per-hour operating budgets.

Rental-first Procurement Shift Among Tier-2 Contractors Expanding Utilization Rates

Rental revenues are set to touch USD 82.6 billion in 2025, reflecting a broad contractor preference for off-balance-sheet equipment access. Utilization rates on connected rental fleets often exceed 85%, roughly 30% higher than owned machines, reinforcing a virtuous loop of asset sweating, predictive maintenance, and residual value optimization. OEMs are realigning channel strategies, embedding telematics that feed real-time data to rental partners and promote service contracts.

EU Stage V Emission Caps forcing Rapid Fleet Renewal Toward Hybrid/E-equipment

Stage V rules now encompass engines below 19 kW and mandate finer particulate thresholds. Atlas Copco notes that compact equipment compliance necessitates diesel particulate filters, while Perkins reports 28% higher power density in new Stage V engines. This regulatory pulse accelerates the construction equipment market shift toward battery-electric compact loaders and hybrid drive lines in mid-range excavators.

OEM Lead-time Spikes (Beyond 42 Weeks) Due to Hydraulic Component Shortages

Delivery windows stretch beyond 42 weeks for critical hydraulic valves and pumps, forcing contractors to adjust project phasing. Market leaders increasingly vertically integrate to secure supply, echoing Caterpillar’s expanded in-house component machining. Persistent bottlenecks threaten to defer replacement cycles and dampen near-term construction equipment market momentum until inventories normalize.

Lithium-ion Cell Scarcity Inflating TCO of Electric Heavy Machinery

Heavy-duty battery packs compete with automotive demand, inflating upfront prices on 20-ton electric excavators by 30% versus diesel peers. This gap compresses buyer ROI windows even though life-cycle costs remain favorable. OEMs with captive battery supply or strategic joint ventures capture early share in the electric slice of the construction equipment market.

Segment Analysis

By Equipment Type: Excavators Anchor Versatility Across Applications

Excavators commanded 51.24% construction equipment market share in 2025 and are projected to register a 7.15% CAGR to 2031. Hydraulic efficiency, quick-attach tooling, and telematics integration sustain demand across road-building, utilities, and demolition. Loaders remain second in volume, with wheel loaders favored for paved operations and track loaders for soft terrain. Crane demand follows high-rise and bridge timelines, while graders and rollers maintain road surfaces to millimeter tolerances.

Bulldozers thrive in mining benches where slope stability requires significant drawbar pull, and dump trucks handle hauls beyond 500 meters. Specialty machines, including concrete pumps and trenchers, together hold a significant share of construction equipment market size. Komatsu’s hydrogen-powered prototype signals future fuel diversification, though widespread adoption awaits refueling infrastructure expansion ^{[2]“Hydrogen Excavator Prototype Press Release,” Komatsu, komatsu.com}.

Note: Segment shares of all individual segments available upon report purchase

By Propulsion Type: Electrification Gains Amid Diesel Dominance

Internal combustion units accounted for 90.12% of 2025 shipments, yet hybrids battery electric models will rise at 22.16% CAGR as regulations tighten. Hybrid systems pair smaller diesel engines with batteries, cutting fuel by 25–35% and enabling quiet, zero-tailpipe operation for idling and indoor work. Caterpillar’s 323 electric excavator delivered lower operating costs on grid-connected redevelopment jobs and logged significant orders by end-2025 ^{[3]“323 Electric Excavator Fact Sheet,” Caterpillar, caterpillar.com}.

Globally, hydrogen fuel-cell rigs are operational in limited numbers, primarily in pilot programs across Japan, Germany, and South Korea. JCB is sidestepping the costs associated with fuel cells, aiming to commercialize its hydrogen combustion engine by 2027. The market for zero-emission construction equipment is closely tied to grid capacity and charging infrastructure. As a result, some buyers are leaning towards hybrids, which offer a diesel fallback until a reliable power source is widely available.

By Equipment Size: Heavy Gear Dominates While Compact Outpaces

Heavy equipment larger than 11 tons captured 71.10% of the construction equipment market share in 2025, fueled by freeway, port, and dam projects that demand 45-ton excavators and 60-ton ADTs. Procurement agencies favor large units to accelerate earthworks and lower per-cubic-meter movement costs. 

Compact machines below 6 tons are rising faster, expected to register a 14.55% CAGR as dense cities favor agile skid steers, mini loaders, and zero-tail-swing excavators. Quick-attach couplers and a broadening attachment catalog now allow a single compact base unit to replace multiple dedicated tools, improving job-site economics for small contractors and rental fleets alike.

By Power Output: Mid-Range Engines Strike Optimal Balance

Machines up to 250 HP held 60.85% of the construction equipment market size in 2025, balancing fuel economy with sufficient breakout force for mixed-use projects. OEM product roadmaps emphasize modular engine families that scale from 140 HP to 250 HP using common blocks and electronic controls, reducing parts inventory.

The 250-500 HP cohort is forecasted to expand at 9.62% CAGR to 2031, propelled by high-throughput export terminals and mining overburden removal. Advances in aftertreatment design, including compact SCR modules, now enable Tier 4/Stage V compliance without enlarging engine bays, preserving machine geometry. Units above 500 HP occupy a niche yet indispensable role in ultra-large earthworks and open-pit mining, where cycle time gains translate into outsized production benefits.

Note: Segment shares of all individual segments available upon report purchase

By Application: Infrastructure Leads, Mining Emerges Fastest

Infrastructure projects represented 73.15% of the construction equipment market in 2025 as governments financed bridge refurbishments, rail extensions, and renewable-energy corridors. U.S. federal outlays via the Infrastructure Investment and Jobs Act are funneled toward highways, while Asia focuses on megacity metro lines. Neighboring segments, such as residential and commercial buildings, maintain stable volumes but face cyclical moderation tied to interest-rate regimes.

Mining and quarrying is the fastest-growing application at a 9.05% CAGR to 2031. Demand for copper, lithium, and rare earths vital to energy transition technologies drives multi-billion-dollar pit expansions across Africa and South America. Autonomous haulage and teleremote drilling, once confined to iron-ore majors, are cascading into mid-tier miners, expanding the technology adoption curve in the construction equipment market.

Geography Analysis

Asia Pacific led with 45.80% of the construction equipment market in 2025, underpinned by China’s Belt and Road Initiative and India’s National Infrastructure Pipeline. Chinese crawler excavator volumes are set to exceed 150,000 units by 2027, more than doubling 2023 output and reinforcing supplier economies of scale. Manufacturers route high-power diesel inventory to Southeast Asia and GCC job sites while shipping compact electric loaders to Japanese and Korean cities.

The Middle East and Africa posts the fastest trajectory at 9.12% CAGR through 2031 as Saudi Arabia’s Vision 2030 and the UAE’s Dubai Urban Master Plan funnel billions into housing, tourism, and logistics. Project awards jumped significantly in 2024, tightening regional equipment supply and prompting OEMs to stage temporary import yards at Jebel Ali Port. Heat-tolerant battery chemistries and sealed cabin filtration systems are differentiators in the Gulf slice of the construction equipment market.

North America maintains a solid outlook propelled by industrial reshoring and infrastructure revamps backed by the IRA and CHIPS legislation. EPA Phase 3 standards, effective model year 2027, are nudging fleets toward hybrid and electric compact equipment for urban utility work. Rental giants consolidate to secure scale, evidenced by multi-billion-dollar acquisitions that compress dealer networks and elevate access fees.