United States Compact Construction Equipment Market Assessment 2023-2029: Bipartisan Infrastructure Law Ignites Demand - Caterpillar, John Deere, and More At the Forefront of Growth

DUBLIN, Oct. 5, 2023 /PRNewswire/ -- The "U.S. Compact Construction Equipment Market - Strategic Assessment & Forecast 2023-2029" report has been added to ResearchAndMarkets.com's offering.

The U.S. compact construction equipment market is expected to surpass 269,862 units by 2028 from 196,462 units in 2022, growing at a CAGR of 4.64%

In 2022, track loaders dominated the U.S. compact construction equipment market, securing the largest market share. Among the end-users in the United States, the construction industry held the most significant portion of the compact construction equipment market. Notably, compact track loaders are experiencing rapid growth within the U.S. compact construction equipment sector. These machines showcase remarkable versatility, excelling in precision even on challenging terrains like rough and muddy surfaces.

The U.S. compact construction equipment market is being propelled by infrastructure upgrade initiatives. These encompass a wide range of projects, including the renovation of commercial buildings, railway stations, airports, runway repairs, and the expansion of roadways and bridges, especially in rural areas across the country.

In a significant development, the Federal Aviation Administration (FAA) has earmarked a substantial budget of USD 3 billion for the enhancement of 3,075 U.S. airports, focusing on terminal improvements. Meanwhile, the U.S. Army Corps of Engineers (USACE) has initiated projects totaling USD 3.9 billion, aimed at fortifying supply chains and bolstering ports and waterways. This extensive endeavor encompasses more than 16 construction projects spanning across 10 states.

The flourishing E-commerce sector in the United States has spurred investments in warehouse expansions. Consequently, the increased demand for warehouse expansion projects is providing a notable boost to the sales of compact forklifts and telehandlers within the U.S. compact construction equipment market.

Leading the way in the U.S. compact construction equipment market are industry giants like Caterpillar, Hitachi Construction Machinery, John Deere, SANY, Komatsu, and Volvo CE. These industry leaders command substantial market shares and offer a wide array of equipment solutions.

On the other hand, Manitou, Kubota, Liebherr, Bobcat, and Toyota Material Handling are niche players within the market. While they may offer limited product diversification, these companies have firmly established their presence within the local U.S. compact construction equipment market.

MARKET TRENDS & DRIVERS

Surge in Government Investment for Upgrading Infrastructure

The U.S. government is investing in the construction sector to strengthen economic activities & employment. The U.S. Department of Transportation invested USD 906 million for redevelopment projects across the country under the Infrastructure for Rebuilding America program in 2022. Compact construction equipment is an idle choice for repair and redevelopment projects in the cities as it can operate in confined places.

The government planned twenty projects in different states to improve major highways, bridges, ports & railroads across the country. The U.S. Department of Transportation's Federal Transit Administration announced USD 400 million in 2022 for transits in Arizona, Indiana, Missouri & New Jersey.

Investments Under the Bipartisan Infrastructure Law Propel Demand for Compact Equipment

In 2021, the Biden government signed the Bipartisan Infrastructure Law (BIL), which focused on promoting the country's infrastructure and competitiveness by rebuilding roads, bridges, ports, and airports in 2022-2026. It also included upgrading rail systems and providing cleaner and cheaper energy.

In addition, the Federal Aviation Administration (FAA) announced an expenditure of USD 3 billion for 3,075 airports across the US to improve terminals. The US Army Corps of Engineers (USACE), on the other hand, floated USD 3.9 billion to improve supply chains and strengthen ports and waterways. It includes over 16 construction projects across 10 states.

Labor Shortage Triggers the Demand for Automated Compact Equipment in the U.S. Compact Construction Equipment Market

According to the U.S. Bureau of Labor Statistics, the U.S. construction industry had approximately 440,000 job openings in April 2022. The investment announced through the Infrastructure Bill in 2021 requires over 300,000 laborers each year to meet the goal of rebuilding infrastructure projects.

Furthermore, the Bill spending is expected to start in 2023 and continue till 2033. It has been estimated that the contractor's segment would witness a shortfall of 160,000 workers, whereas the materials sector would experience a scarcity of 145,000 workers and 40,000 workers in the engineering sector.

Landscaping & Gardening Trigger Use of Compact Track Loader

The demand for track loaders in the U.S. compact construction equipment market has grown sharply recently. The equipment can better hold the ground on rough terrain than other compact equipment. Track loaders are versatile equipment that can be used with various attachments and efficiently apply digging & material handling.

This equipment puts low pressure on the ground. Therefore, it can be used on muddy and unpaved surfaces. There is a rise in gardening and landscaping activities post-pandemic in the U.S. According to National Gardening Association data; there were 18.3 million new gardeners added in 2021.

INDUSTRY RESTRAINTS

High Mortgage Rates to Restrict Residential Construction Demand

Residential construction in the country declined to its lowest in 2022 due to high mortgage rates and increased construction material prices. In October 2022, the average interest rate was 7.06%, and the house prices reached USD 525,000, a 40% increase compared to 2020.

The Federal Reserve further predicted the mortgage rates to be at 4.6% in 2023, comparatively higher than the pre-pandemic levels. Moreover, high rates have crushed house demand because buyers must pay more for mortgages. The mortgage application declined by 38%, the lowest in 25 years.

Warehouse Shrinkage in the U.S. Expects to Restrict U.S. Compact Construction Equipment Market Growth

The U.S. warehouse development is expected to slow down in 2023. Therefore, U.S. industrial and leasing activities are set to decline between 10% and 15% during the same period. The average warehouse vacancy rate increased to 3.2% in the second quarter of 2022. Rent rates in the warehousing sector have increased drastically due to increasing labor costs.

The rent of warehouses near the ports has increased. For instance, the Southern California Inland Empire rent increased by 24% in 2022. The shortage of warehouses is expected to disrupt the logistics sector. In September 2022, Amazon canceled its plans to build a dozen warehouses across the United States.

KEY QUESTIONS ANSWERED:

• How big is the U.S. compact construction equipment market?
• What is the growth rate of the U.S. compact construction equipment market?
• Who are the key players in the U.S. compact construction equipment market?
• What are the trends in the U.S. compact construction equipment market?
• Which are the major distributor companies in the U.S. compact construction equipment market?

VENDOR LANDSCAPE

Prominent Vendors

• Caterpillar
• Komatsu
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• Volvo Construction Equipment
• Hitachi Construction Machinery
• JCB
• SANY
• Kobelco
• Hyundai Construction Equipment
• John Deere
• Zoomlion Heavy Industry Science & Technology Co. Ltd
• Kubota
• Bobcat

Other Prominent Vendors

• Liebherr
• Yanmar
• LiuGong
• Takeuchi
• Toyota Material Handling
• Manitou
• Terex Corporation

Distributor Profiles

• National Equipment Dealers
• Equipment USA
• Kirby-Smith Machinery INC
• Mico Equipment
• My Equipment

SEGMENTATION ANALYSIS

Segmentation by Type

• Excavators
• Backhoe Loaders
• Wheel Loaders
• Track Loaders
• Skid Steer Loaders
• Telehandlers
• Forklifts
• Aerial Platforms
• Others

Segmentation by Application

• Material Handling
• Maintenance & Utility Works
• Waste Management
• Others

Segmentation by End Users

• Construction
• Mining
• Warehouse & Logistics
• Others (Maintenance & Utility Works, Landscaping, Power Generation)

For more information about this report visit https://www.researchandmarkets.com/r/7lknew

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