Global demand to rise 4.9% annually through 2009
Worldwide demand for heavy construction equipment is projected to rise 4.9 percent annually through 2009 to $110 billion. Growth will be supported by the expected continued expansion of the global economy, with high points including Eastern Europe, India, South America and a resurgent China. Within the Triad (i.e., North America, Japan and Europe), North America is expected to maintain its lead in terms of both the overall size of demand and growth potential, as the growth prospects for Japan and Western Europe will be hampered by a combination of negative demographic and structural trends, including aging populations and high levels of regulation and taxation.
China, Eastern Europe to pace non-Triad growth
In the non-Triad regions, future prospects are favorable in China, despite the recent weakening of the construction equipment market due to tightening credit policies. Construction equipment demand will
continue to benefit from that nations aggressive industrialization efforts. Eastern Europe should also provide a strong base for construction equipment demand in the coming years. Eight East European countries -the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia -entered the European Union (EU) in May 2004, and in April 2005 Romania and Bulgaria signed accession treaties to join the EU in 2007. Based on the economic turnarounds experienced by other countries joining the EU, expected infrastructure and economic improvements should help to strongly increase construction equipment demand going forward. Construction
machinery markets in Africa/Mideast are projected to climb at about the same pace as during the 1990s, with that regions continuing political turmoil preventing demand from rising as quickly as in other developing areas.
North America to lead gains in Triad
Within the Triad, 2004 was a year of recovery and growth for North America, where market expansion was driven by the explosive US real estate market. Most competitors saw sales and operating profits improve from years of stagnant sales and difficult profitability. Future growth will moderate somewhat but remain healthy in the region. In addition to
improving fundamentals in most developing areas, the pace of growth in Western Europe is expected to increase somewhat, though remain below the global average. Demand for construction equipment in Japan will benefit from an improvement in fixed investment activity, but is expected to continue to be undercut by soft public sector investment. Most West European markets are expected to experience only moderate construction equipment growth going forward, with even strongperforming Spain experience a tapering-off of demand. The strong euro, combined with an aging population and other constraints all foreshadow moderate growth at best for the region.
Study coverage
This new Freedonia industry study, World Heavy Construction Equipment, presents details on these and other key findings. This study provides historical demand data (1994, 1999, 2004) plus forecasts to 2009 and 2014 by product, region and for 29 countries. The study also considers market environment indicators, presents company market share and profiles 34 global industry players.
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