Construction Industry: The Key trends that may blow the construction industry in 2023!
2023 is shaping up to be a fantastic year for construction. With technological advancements and high demand for services, the only way to go is up.
The Indian construction industry is forecast to register an annual average growth of 6.2% from 2023 to 2026, supported by a strong pipeline of infrastructure projects across various sectors. This strong growth is attributed to the favorable base set in 2020, coupled with an improvement in consumer and business confidence amid the progress in the vaccination drive and the implementation of various infrastructure projects. According to the Infrastructure and Project Monitoring Division of the Ministry of Statistics and Program Implementation (MoSPI), the country had 1,559 projects in the pipeline, worth INR 26.7 trillion ($352.3 billion), as of May 1, 2022. Of the total, projects in the road transport and highway sector account for the highest number of projects in the pipeline, equivalent to 53.6%; this is followed by railways (13.5%), petroleum (8.7%), coal (7.6%), power (5.1%) and water resources (2.6%), among others. Moreover, government programs such as Atmanirbhar Bharat, which is expected to boost domestic industries, micro, small and medium enterprises (MSMEs) and the Pradhan Mantri Gati Shakti National Master Plan, which aims to drive economic growth through infrastructure development, are also expected to attract investment to the construction industry in the coming years.
Emerging trends that directly impact the dynamics of the construction industry include a rise in the need for green construction to reduce carbon footprint, bridge lock-up device systems to improve structure life, building information systems for efficient building management, and the use of cutting-edge technologies. Let us look at some of them in detail.
Increased use of Digital Technologies
Most construction companies are utilizing digital technologies to expand business opportunities and boost profits by reducing costs in the long run and enhancing project execution. Further, the need for digital transformation in construction has become much stronger with increased global supply chain disruptions, increased competition, worker shortages, and skyrocketing material prices. These high-tech machines have also transformed the construction industry. However, interested businesses must investigate which machines are most appropriate for assisting with timeconsuming or labor-intensive tasks.
Green Building and Sustainability
Building operations and construction account for nearly 40% of global energy-related CO2 emissions. However, as global awareness of the severity of climate change grows, the industry is taking concrete steps to reduce its environmental impact. Many customers are becoming more sustainabilityconscious and placing greater pressure on developers to lower the carbon footprint of new construction. The increasing global focus on climate change could incentivize construction companies to factor sustainability into their projects, construction processes, and designs Industry leaders are looking for ways to reduce material waste from demolitions, switch to ecofriendly building materials, and choose locally sourced building products. Construction clients are also investing in companies that provide the sustainable, environmentally friendly practises they seek.
Remote Worksites :
Construction firms navigated strict safety protocols while maintaining productivity throughout 2020. Mobile construction apps have expanded the industry while keeping workers, clients, and contractors safe. As we approach 2023, construction companies recognise the value of remote work sites and mobile access to their bottom line. Many phases of construction can be completed remotely, saving both the builder and the client time and money. More technological advancements that enable work to be done offsite are expected, allowing projects to be finished faster than ever before.
Modular Design : Modular construction is rapidly becoming a preferred approach of constructing in the construction field. A modular building is built offsite and then assembled onsite. This process allows for a faster construction schedule, a greener building process, and smarter design. The modular building process also produces less waste. Building crews can recycle used materials and keep track of inventory. Furthermore, the buildings can be refurbished or relocated, reducing the amount of energy and materials required for a new project. According to projections, the modular construction market will be worth up to $157 billion by 2023.
Use of Rented equipment : Construction companies will continue to consider renting equipment or purchasing used merchandise rather than purchasing new items. Both of these options are construction industry trends for 2023 because they allow businesses to keep up with technological advancements at lower costs. Rented equipment, in particular, allows construction companies to test whether different machines deliver the expected results.
Confidence and permits are soaring So, what are the economic drivers of this positive future? In 2020, new buildings were put on hold due to COVID-19, but building renovation continued, even if at a slower pace, as people spent more time at home and had the money to invest in retrofits.
Now there is a change in commercial behavior that is focused more on distribution centers and warehousing, while hospitality and leisure will see new vitality.” As a result, the number of permits for new nonresidential buildings has skyrocketed. Double digit growth is now anticipated across the countries surveyed by Euroconstruct with these investments expected to materialize between 2022 and 2024.
In addition, confidence in the market is back to pre-pandemic levels and the expected rise in interest rates started but slower than anticipated. This means money is still available at favorable rates and investors feel comfortable, particularly due to the expected
normalization of supply and demand in 2022. Renovation of 35 million buildings by 2030 In 2021 there was imbalance of supply and demand in terms of building materials and many manufacturers were taken by surprise. Now they have geared up their production side and demand has stabilized and we no longer have the strange seasonality we experienced in 2021. The imbalance of supply and demand will be slowly normalized in 2022 with another positive trend to come. 2021 has shown a strong increase of materials trade but did not see a rebound in the trade of services but this is expected to change in 2022.
Wheeled Loader> 80HP segment and 100- 200HP segment are estimated to be the largest market during the forecast period.
By equipment type, the wheeled loader >80 HP segment is estimated for the construction equipment market in 2021. These equipment used primarily to load/unload and bulk
material movement in construction, quarry, and crushes. They are widely used in largescale infrastructure projects such as roads and highways, dams, ports, and airports. An increase in roadways and residential buildings in India and China is driving the demand for these equipment. Government initiatives in infrastructure development have further anticipated the demand for wheeled loaders. Construction equipment with this power output allows manufacturers to improve machine www.constructionmirror.com capability and downsize the engine to one of lower displacement. This reduces maintenance costs and improves fuel economy and better component layout. Construction equipment with a power output range between 100- 200HP is primarily suitable for road, airport construction projects, and commercial projects.
Excavators (crawler and wheeled), loaders (backhoe, skid-steer), and motor grader are considered under earthmoving equipment. These equipment are designed for construction activities.
Asia : Largest Market for the Construction Equipment Market
The largest share of the earthmoving equipment market is projected to be dominated by the Asia Pacific region in terms of value and volume by 2026. The construction equipment market has experienced growth in terms of the number of projects such as dams, airports, and hydroelectric projects, because of which many international companies have started their manufacturing plants in that specific regions. The regions such as China and India create immense opportunities for the construction equipment market to grow as they are the most populated countries in the world. The global construction equipment market is dominated by global players such as Caterpillar Inc., Komatsu Ltd., Xuzhou Construction Machinery Group (XCMG), and Sany Heavy Industries. These companies develop new products, adopt new technologies, expansion of strategies, and undertake collaborations, partnership, and alliances & amalgamates to gain traction in the market. According to the ‘Research and Market’, India construction equipment market is expected to grow at a CAGR of 8.9 % during 2022-2028.
The Emergence of Rental Construction Equipment Services
Rental services are significantly gaining the haulage of consumers in the worldwide equipment industry these days. According to the Construction Equipment Rental Association, emerging and most populated economies are expected to see increased demand for rental services generating sizeable revenue from their local customer base. In order to benefit their business and customers simultaneously, construction companies focus on sectors such as general infrastructure, utility, and electrical, oil and gas, as well as commercial and residential development. Developing and the most populated economies such as India and China are expected to witness surging demand for rental service business over the forecast period. The regional and local emerging players are likely to establish their footprint in the rental service business, creating plentiful revenues from their regional customer base. Large Apart from that with infrastructure plans receiving improved budgetary allocations in developing countries, the construction equipment rental market’s growth would be gradually, as governmental projects show a higher preference for the rental use of equipment. Furthermore, it is safer, comfortable, and more affordable for governments to work with rental companies than owing their acrobatics of construction machinery
Key Benefits For Stakeholders
The report provides an extensive analysis of the current and emerging heavy construction equipment market trends and dynamics. In-depth heavy construction equipment market analysis is conducted by constructing market estimations for key market segments between 2021 and 2030. Extensive analysis of the heavy construction equipment market is conducted by following key product positioning and monitoring of top competitors within the market framework. A comprehensive analysis of all the regions is provided to determine the prevailing opportunities. The global heavy construction equipment market forecast analysis from 2021 to 2030 is included in the report. The key players within the market are profiled in this report and their strategies are analyzed thoroughly, which help understand the competitive outlook of the heavy construction equipment industry.
By Equipment Type Analysis
Material Handling Equipment & Cranes Segment to Show Lucrative Growth Rate in the Forecast Period Based on equipment type, the market is segmented into earthmoving equipment, material handling equipment and cranes, concrete equipment, road building equipment, civil engineering equipment, crushing and screening equipment, and others. The material handling equipment segment is projected to have exponential and significant growth owing to the rising need for cranes and other machinery across several domains for handling heavy construction materials and products. AGV, forklift trucks, and telescopic handlers are the basic material handling cranes used in construction and warehouse applications. Furthermore, road building and earthmoving equipment segments are expected to show progressive demand as the investments for industrial and commercial construction projects are rising in developing countries such as China and India. Civil engineering and concrete equipment segments are anticipated to depict stable growth as the need for this equipment depends upon the number of ongoing construction and infrastructure projects. The crushing & screening equipment segment is expected to have considerable growth owing to limited demand for mining applications. The other equipment consists of tippers, trailers, and tankers that are likely to have stagnant demand in the overall market.
Industrial Application Segment to Witness Exponential CAGR
Based on application, the market is segmented into residential, commercial, and industrial. The industrial application segment is anticipated to portray progressive growth in the near future to rising industrialization and foreign direct investments (FDI) for several international manufacturing plants in developing countries. Commercial infrastructure development across developed and developing countries is likely to depict a considerable market worldwide. Rapid population growth in Asian and African countries is expected to uplift the market with stable growth for the residential sector applications. Furthermore, in the Middle East & Africa, the Gulf Council Corporation holds the highest share in the regional market, owing to the development of large-scale infrastructure projects across the GCC countries. However, these countries have been affected severely by the COVID-19 pandemic, leading to reduced operations in the construction sector, which is projected to slow down the progress of the Saudi Vision 2030 project. Similarly, the construction sector in Latin America has had steady growth over the past few years, owing to moderate infrastructure
Conclusion : As can be seen, 2023 is shaping up to be a fantastic year for construction. With technological advancements and high demand for services, the only way to go is up. With an emphasis on rebuilding infrastructure, sustainable buildings, and smart cities, construction companies that embrace the industry’s changing landscape will have more opportunities.
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