Global demand for off-road equipment is forecast to rise 5.5% between 2021 and 2022 to $481 billion, slightly above 2019 levels. Overall growth will be bolstered by investment in new and replacement machinery featuring state-of-the-art technologies, many of which are designed to improve efficiency and productivity. These include:
Smart off-road equipment sales are projected to grow 35% in 2022 and then more than double by 2026, when they will account for nearly 5% of all off-road equipment demand. Construction is currently the largest market for smart equipment, although demand will expand most quickly in the mining sector (which is expected to become the leading market for smart off-road equipment technology by 2026) as operators increasingly use advanced technologies - such as autonomous equipment and digital mine management solutions - to lower costs and boost output.
High production costs and labor shortages mean that advanced off-road equipment is typically most cost-effective in high-income countries such as Australia, Canada, Germany, and the US. Use of state-of-the-art technology will remain limited in lower- and mid-income nations, where profits are less influenced by labor costs and emissions standards are generally less stringent. The mining industry is a notable exception, since many of the world’s largest mines - which are operated by multinational companies that can afford advanced, high-end machinery - are located in lower-income countries.
China is by far the largest consumer of off-road equipment, accounting for 31% of demand in 2021. The country is forecast to represent 26% of global absolute gains in 2022. However, opportunities will differ between the major markets:
As a result of these trends, the global construction machinery market is expected to decelerate in 2022, while the mining machinery and agricultural equipment markets will continue to grow at a rate similar to 2021.
- Autonomous and semi-autonomous equipment, such as robots
- Fuel efficient and low- or zero-emission equipment
- Units with advanced ergonomics that provide improved operator comfort and safety
- Drones, global positioning, predictive maintenance, and other solutions made possible by developments in the Industrial Internet of Things (IIoT)
Demand for Smart Off-Road Technology to Climb Six Times Faster than Total Equipment Sales
Smart off-road equipment sales are projected to grow 35% in 2022 and then more than double by 2026, when they will account for nearly 5% of all off-road equipment demand. Construction is currently the largest market for smart equipment, although demand will expand most quickly in the mining sector (which is expected to become the leading market for smart off-road equipment technology by 2026) as operators increasingly use advanced technologies - such as autonomous equipment and digital mine management solutions - to lower costs and boost output.
Rising Labor Costs & Tightening Emissions Standards Drive Purchase of Advanced Equipment
High production costs and labor shortages mean that advanced off-road equipment is typically most cost-effective in high-income countries such as Australia, Canada, Germany, and the US. Use of state-of-the-art technology will remain limited in lower- and mid-income nations, where profits are less influenced by labor costs and emissions standards are generally less stringent. The mining industry is a notable exception, since many of the world’s largest mines - which are operated by multinational companies that can afford advanced, high-end machinery - are located in lower-income countries.
China Has an Outsized Impact on Global Demand for Off-Road Equipment
China is by far the largest consumer of off-road equipment, accounting for 31% of demand in 2021. The country is forecast to represent 26% of global absolute gains in 2022. However, opportunities will differ between the major markets:
- Mining and agriculture will see solid growth as these markets continue to recover from the pandemic-related declines in 2020.
- Construction will advance more slowly from a high base, as the market for this equipment posted significant gains in 2020, when a combination of strong government spending and China’s ability to mitigate negative economic effects from the pandemic’s initial phase spurred investment in new and replacement construction equipment.
As a result of these trends, the global construction machinery market is expected to decelerate in 2022, while the mining machinery and agricultural equipment markets will continue to grow at a rate similar to 2021.
Table of Contents
1. Executive Summary
2. Impact of COVID-19 Pandemic
3. Regional Outlook
4. Global Technology Trends
5. Construction Machinery
6. Agricultural Equipment
7. Mining Equipment
8. Forestry Equipment
9. Manufacturer Spotlight
10. Appendix
List of Tables
List of Figures
Companies Mentioned
- AGCO
- Caterpillar
- CNH Industrial
- Deere
- Hitachi
- Komatsu
- Liebherr-International
- Sandvik
- Tigercat
Methodology
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