North America Construction Equipment Market size was around USD 28 billion in 2019 and is expected to grow at a CAGR of 4% from 2020 to 2026.
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Rapidly growing urbanization in countries including the U.S. and Canada is driving the construction equipment market growth. Rising employment opportunities and shift toward urban areas have led to increasing public & private sector investments in the construction sector. According to the U.S. Commerce Department, during the first four months of 2020, construction spending in the U.S. amounted to USD 412.5 billion. High demand for faster construction of buildings and facilities for the rising population is positively influencing market statistics.
The escalating development of smart cities in North America is one of the major factors contributing to the increasing demand for construction equipment. Government initiatives, such as the Smart Cities Project under the U.S. Economic Development Program, are supporting the regional construction equipment market. Technologically advanced construction machines including earthmoving & road building equipment and material handling equipment are increasingly used for fast paced development of smart cities in the region.
The ongoing coronavirus (COVID-19) pandemic has severely impacted the construction industry in North America. Regional and local governments are shifting their focus from the development of large infrastructure projects toward mitigating the impact of the pandemic. Several factors including disruptions in supply chain and shortage of raw material & labor have impacted the production capabilities of manufacturers. Large construction contractors and infrastructure development companies are postponing their purchase decisions due to growing financial insecurities and capital crunch. The market is expected to grow steadily with reduction in economic impacts of the COVID-19 pandemic.
The expansion of the Internet and mobile connectivity in North American is also a major factor promoting the market growth of material handling equipment and cranes. Government initiatives to provide telecommunication facilities to small towns are driving demand across the telecom sector. Internet connectivity is a prerequisite for smart homes and IoT applications, which is predicted to grow substantially over the next few years. The installation and maintenance of telephone lines are driving the adoption of advanced cranes with pre-installed technologies such as telematics.
The U.S. construction equipment industry will witness a substantial growth owing to growing investments by suppliers & manufacturers in the installation of automated equipment in distribution centers and warehouses. The regional market has witnessed a considerable growth owing to the emergence of e-commerce companies. Major players, such as Amazon and eBay, are investing significant amounts in the construction of warehouses for storage of inventory. For instance, in September 2020, Amazon announced its plans to construct over 1,000 warehouses and delivery hubs in the sub-urban areas of the U.S.
Key players operating in the market are Caterpillar, Inc., Terex Corporation, CASE Construction Equipment, Deere and Co., AB Volvo, Komatsu Ltd., and Hitachi Construction Machinery. These players are focusing on launching new products in response to the growing industry demand. For instance, in March 2020, Caterpillar launched its new backhoe loader 420 XE at the Conexpo 2020, Las Vegas, U.S. The equipment has additional features including electronic loader controls with programmable loader kickout and return-to-dig.