Market Trends of Europe Construction Equipment Industry
This section covers the major market trends shaping the Europe Construction Equipment Market according to our research experts:
Electrification of Construction Equipment
An increase in construction activities across the globe has resulted in increased diesel consumption. Although diesel has a higher energy density than gasoline, its combustion releases dangerous exhausts into the environment. Governments and pollution regulatory bodies across Europe have established regulations requiring diesel engines to produce almost negligible NOx and SOx emissions. For instance,
- October 2022: According to the European Commission, the new Euro 7 standards will result in cleaner vehicles on the road and better air quality. It also helps the Commission meet the new stricter air quality standards proposed. The limits will be tightened for lorries and buses, while the lowest existing limitations for cars and vans will now apply regardless of the fuel used by the vehicle. The new rules also set emission limits for previously unregulated pollutants, such as nitrous oxide emissions from heavy-duty vehicles.
Electric construction equipment is a zero-emission machine and produces very little heat, noise, and vibrations. This has opened the doors for OEMs to switch to hybrid and pure electric vehicles in the future. The market for electric construction equipment is growing steadily, with nearly half of 2022 launches being electric and as many as 140 non-combustion machines introduced in the last 14 months. So far, in 2022, 860 devices have been updated, with approximately 75 being entirely new products. Thirty-six of them are powered by electricity.
Electric construction equipment uses fewer parts than diesel equipment, and the use of electricity brings down the total cost of operations for both the equipment provider and the customer. Key construction equipment manufacturers across the globe have launched their electric construction equipment to mitigate the use of conventional fuel vehicles, in line with their sustainability policies.
Infrastructure Development on Rise
The construction industry contributes more than 9% to European Union's current GDP. Europe is witnessing a major growth in construction owing to the rapid development of transport infrastructure. Projects such as the London Crossrail (worth more than EUR 17 billion) and Germany and Denmark's Fehmarn Belt Fixed Link which is 18 kilometers long world's longest immersed road and rail tunnel are driving the growth of the market.
Europe ranks top in the usage of wheeled excavators when compared to the United States. As most of the work done in Europe takes place in urbanized areas, demand for construction equipment grew in almost every country after the economic slowdown during 2008-10. This can be credited to the factors such as residential construction activities in Germany and France and low-interest rates and infrastructure development in South European nations. The big city plan will increase the size of Birmingham city of England by 25%. With an estimated cost of USD 17 billion, this plan aims at constructing 5000 new houses and revamping New Street Station at an estimated cost of 600 million euros.
Also, the construction industry is getting smarter. Digitalization, connectivity, and automation are driving development forward, leaving a substantial impact on construction projects. Tech companies like Iotic, construction company BAM Nutall of the UK and researchers from Cranfield University have developed an AI-based twin technology system that gives live updates of the progress at the construction site. This technology increases on-site productivity and operational efficiency while leaving behind, a minimal carbon footprint, and a considerably lower environmental impact.
