Although the growth rate has slowed down in the first half of 2024, the export scale of construction machinery is still at a historical high!
Under the influence of high base and slowing demand, the export market has entered a phase of pressure since the second half of 2023, and will continue to be under pressure in the first half of 2024. However, in 2024, the overall export market for construction machinery showed a trend of increase after a decline , and the decline in overseas demand gradually narrowed in the second half of the year.
In 2024, the import and export trade volume of construction machinery in China reached 55.45 billion US dollars, a year-on-year increase of 8.6%. Among them, the import amount was 2.591 billion US dollars, a year-on-year increase of 3.2%; The export amount was 52.859 billion US dollars, a year-on-year increase of 8.9%.
According to relevant data and predictions, the global construction machinery market is expected to grow steadily from 2024 to 2026, exceeding $200 billion by 2028. There is still significant room for downstream demand in the overseas construction machinery industry. But there is a certain differentiation among different products and regions. Looking ahead to 2025, what is the demand situation in different regions? What are the core influencing factors?
Middle East region
01 Strong demand for real estate infrastructure
In recent years, the Middle East region has provided significant opportunities to China's construction machinery exports due to its massive infrastructure scale and rapidly growing market demand.
Taking Saudi Arabia as an example, China's total export of construction machinery to Saudi Arabia in 2020 was only 810 million yuan, which rapidly increased to 3.6 billion yuan by 2023, with a compound annual growth rate of 64.7% from 2020 to 2023. China's export of construction machinery products to the Middle East is entering a rapid upward trend.
At present, China's exports of construction machinery products to the Middle East are rapidly increasing. From January to July 2024, countries such as Saudi Arabia and the United Arab Emirates have become the top ten export target countries for various types of construction machinery products in China. With the in-depth implementation of the Belt and Road initiative and the continuous strengthening of friendly cooperation with Middle East countries, Chinese construction machinery enterprises will usher in unprecedented new opportunities in the Middle East market.
02 Heavy equipment such as excavation and concrete dominate the demand
In terms of products, the demand for construction machinery in the Middle East is mostly driven by infrastructure real estate, with heavy equipment such as medium and large excavators, concrete, and cranes being the main demand. In recent years, with the infrastructure boom in the Middle East, the average export price of equipment in the region has remained stable or slightly decreased, with considerable profit potential.
At the enterprise level, enterprises such as Zoomlion, XCMG, Sany, and LiuGong are actively expanding their presence in the Middle East market and achieving good results. Zoomlion has multiple branch offices dedicated to researching and developing marketable products, with significant performance growth and leading market share in the construction crane market; XCMG Group has established a wide sales and service network, with products designed specifically for local climate and working conditions, resulting in strong market performance; Sany Heavy Industry has a wide product layout and significant sales growth; Liugong has signed a cooperation agreement with a UAE company, and the market share of loaders in the UAE has steadily increased.
Africa
01 Mining investment, large-scale infrastructure drive market demand
Due to the short development time, slow urbanization progress, and incomplete infrastructure construction in African countries, the demand for construction machinery is mostly concentrated in the transportation infrastructure field, resulting in a high demand for earthmoving machinery.
Meanwhile, Africa accounts for approximately 30% of the world's total mineral reserves, with almost every country containing at least one key mineral resource. There is also a high demand for equipment commonly used in the mining industry, such as excavators and bulldozers.
At present, the export value of construction machinery products from China to Africa is also rapidly increasing. Taking the top ten African countries in terms of GDP, such as South Africa, Egypt, and Algeria, as an example, China's export of construction machinery to these ten countries was only 2.22 billion yuan in 2020. However, in 2024M1-10, it rapidly increased to 5.72 billion yuan, an increase of 28%. Since 2020, the CAGR has reached 34.0%, and the export scale has continued to increase.
02 Heavy equipment is the main equipment, and the average price is higher than other regions
In terms of products, the demand for construction machinery in Africa is mainly driven by mining investment and large-scale infrastructure, with heavy equipment which has strong profitability such as medium and large excavators and medium and large pushers, and the average price is higher than other regions.
In terms of enterprises, in recent years, Chinese construction machinery companies have significantly expanded in the African market, not only establishing sales networks, but also implementing localization strategies, such as establishing subsidiaries in Ghana, Guinea, the Democratic Republic of Congo, Nigeria, South Africa and other places to provide timely after-sales service and spare parts services. This localization strategy not only improves customer satisfaction, but also enhances the market competitiveness of the enterprise.
Russia
01 The demand growth rate is relatively guaranteed
Russia has abundant mineral resources and a consistently high level of prosperity in the mining and oil extraction industries, resulting in a strong demand for local construction machinery and equipment. In 2023, the sales volume of construction machinery in Russia increased significantly by about 50% year-on-year.
At the same time, benefiting from the dividends brought by geopolitical factors, European and American brands have withdrawn from the Russian market in recent years, and the awareness of Chinese brand has rapidly increased in Russia, achieving a doubling of market share.
In 2024, after the rapid growth of the previous year, the import growth of Russian construction machinery products slowed down. However, based on strong fixed assets investment and stable oil exports, the market generally expects that the Russian construction machinery market will tend to stable and sustainable growth.
America
01 Infrastructure update and replacement of real estate
From the perspective of market driving factors, housing construction and infrastructure are the core demands.
Due to the impact of the general election in 2024, demand is expected to be released by 2025. On the one hand, the implementation of interest rate reduction will strengthen the residential fixed assets investment, and then drive the recovery of market demand; On the other hand, the relevant strategies of the US government promote the return of manufacturing industry, and infrastructure investment and manufacturing fixed assets investment also provide support for the market.
02 Significant export growth
In 2024, China's construction machinery will show significant growth in the US market.
According to relevant data, in the first three quarters of 2024, China's exports of excavators and loaders to the United States reached 39000 and 21000 units, respectively, an increase of 56.7% and 325.3% year-on-year. As a result, the United States has become the largest export market for excavators and loaders in China, accounting for 22.4% and 22.2% of the total export volume, respectively.
Southeast Asia
01Mineral development investment growth forms demand support
In the medium to long term, the demand space in the Southeast Asian market remains vast.
As the largest market in ASEAN, Indonesia's construction machinery market is highly volatile, with mining demand as the main focus and excavators as the dominant force. The long-term trend is positive.
Vietnam's economic growth momentum is strong. In the first 10 months of 2024, the import and export of goods increased by 15.8% year-on-year, with a large proportion of imports being machinery and components. At the same time, the rapid development of its manufacturing industry has stimulated the demand for construction machinery, such as infrastructure projects in ports, highways, industrial parks, etc., which require a large number of excavators, cranes, and concrete mixing equipment.
The Thai construction market is expected to continue to grow between 2024 and 2026, with increased government spending on large-scale projects such as the Eastern Economic Corridor and improvements to the national highway and railway systems, driving demand for construction machinery.
Malaysia is in a period of economic development and structural adjustment, further improving infrastructure construction to attract foreign and private investment, and having a wide market for construction machinery products.
For 2025, from an overall trend perspective, the economy of Southeast Asia is expected to continue to grow, the urbanization process will accelerate, and infrastructure construction will continue to advance, which will further drive the demand for the construction machinery market.
02 Second Local Market
Driven by the Belt and Road initiative, RCEP and other policies, domestic enterprises have gradually expanded their share in the Southeast Asian market by virtue of geographical advantages, cost-effective products and good services. Xugong Group, Sany Heavy Industry, Zoomlion Heavy Technology, Liugong, Shanhe Intelligent and other enterprises have actively invested in building factories, offices and service centers in Southeast Asian countries, and participated in major infrastructure construction projects, such as the China Laos Railway, Ya'an Wanzhou High speed Railway, etc.
Indonesia, as the largest construction machinery market in Southeast Asia, is a key area for Chinese companies to layout, and many companies consider it as the second local market.
Overall, although the development of engineering machinery exports has gradually entered a stable period, the overall positive trend has not changed. From a regional perspective, Indonesia, Africa, the Middle East, and other regions are expected to see industry growth, and the market share of Chinese brands is also expected to increase. From a product perspective, earthmoving machinery such as excavators and loaders are the main categories for Chinese construction machinery manufacturers to go global, and currently have stable market share in most markets.
