Construction equipment refers to heavy-duty vehicles, machinery, and operational tools that are used in the construction industry to perform demolition, excavation, transportation and construction activities. The main equipment used includes earthmoving, material handling, road and tunnel building, concrete and others. Rental construction equipment offers several advantages such as reducing capital investment, providing flexibility for temporary projects, affordability, and lower repair and maintenance costs. The rental equipment helps contractors to complete projects on time and within budgets.
The global Construction Equipment Rental Market is estimated to be valued at US$ 237.8 Bn in 2023 and is expected to exhibit a CAGR of 5.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The construction equipment rental market size is witnessing significant growth owing to the increasing infrastructure development activities around the world. The growing investments in development of roads, highways, bridges, railways and other public infrastructure is driving the demand for construction equipment rentals. Additionally, rising megaprojects in sectors such as energy, oil & gas, and mining, is also fueling the market growth. Furthermore, government initiatives to facilitate SME contractors through equipment rental services is positively impacting the rental market. For example, in 2021, the Indian government launched ‘Operation 5-5-5 plan’ to promote equipment bank scheme to facilitate equipment rentals for SME contractors. However, risks of equipment failures and maintenance costs along with the seasonal nature of construction activities remain key challenges for equipment rental businesses.
Porter’s Analysis
Threat of new entrants: The construction equipment rental market requires high initial capital investments which acts as a barrier for new companies. Existing players have established brand names and strong distribution networks.
Bargaining power of buyers: The bargaining power of buyers is moderate as there are numerous construction equipment rental companies buyers can choose from. However, switching costs exist if buyers change suppliers frequently.
Bargaining power of suppliers: Original equipment manufacturers (OEMs) have some bargaining power over construction equipment rental companies as they are major suppliers. However, the threat is reduced due to presence of multiple equipment suppliers.
Threat of new substitutes: There exist no close substitutes for construction equipment rentals. Equipment owned by construction contractors cannot replace rentals completely due to high initial costs.
Competitive rivalry: The global construction equipment rental market is highly fragmented with the presence of numerous local and regional players. However, a few major international players dominate the market.
Key Takeaways
The global construction equipment rental market is expected to witness high growth, exhibiting CAGR of 5.1% over the forecast period, due to increasing infrastructure development activities globally. The market size for 2023 is estimated at US$ 237.8 Bn.
Regional analysis: The Asia Pacific region dominates the global construction equipment rental market owing to rising infrastructure development projects in countries such as China and India. North America is another major market fueled by infrastructure revamp in the US. Europe is anticipated to exhibit steady growth in the forthcoming years.
Key players: Key players operating in the construction equipment rental market are Ramirent, AKTIO Corporation, NISHIO RENT ALL Co., Ltd., AB2000, Cramo Oyj, Ahern Rentals Inc., Byrne Equipment Rental, American Equipment Company, Inc., United Rentals, Inc. (acquired BlueLine Rental), and Ashtead Group plc. The market is dominated by a few global players due to high consolidation.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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