The COVID-19 pandemic has put significant strain on the global construction sector, with construction equipment manufacturers and many other industry players struggling to stay afloat as demand for construction products and services sinks. Projects around the world have slowed and stopped as workers fell sick, countries locked down, and companies struggled to operate while maintaining physical distancing and robust cleaning procedures.
The coronavirus has caused unemployment across industries, but construction is among those being hit the hardest. The sector has lost millions of jobs, and in many countries is seeing the worst losses in 10-20 years. The UK construction industry, for example, hadn’t completely recovered from the 2008 economic crisis and has now been set back even further. In the US, close to a million employees in the industry lost their jobs in April, bringing its unemployment rate above 16%.
Given these challenges and setbacks, the global construction industry is expected to contract as companies downsize, close, or merge with others. The market has not come to a complete halt, however, as there is still demand for projects such as hospitals and other medical facilities, laboratories, and shipping and logistics infrastructure. In addition, some countries are beginning to gradually reopen and increase activity across sectors.
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One of the world’s largest markets reopens
China, a country responsible for roughly 30% of worldwide demand for the industry, has begun restarting operations such as construction. April was the first month that its industrial output had increased since January as the country began introducing new projects and measures to revitalize its economy, and demand for construction equipment such as excavators has risen significantly. Construction equipment manufacturers are seeing a boost in sales because of this, including companies such as South Korea’s Doosan Infracore and Hyundai Construction Equipment Co., as well as China’s own Sany Heavy Industry. This is despite these vendors raising their prices in order to reflect current market challenges. Indeed, excavator sales rose 65% in China during the month of April, and experts predict that industry growth will continue at a similar rate through June.
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Construction equipment gets smart
Construction equipment companies are also looking to digitalization, smart construction, and automation to help increase sales during a difficult time and allow construction projects to decrease costs and cope with reduced numbers of workers. Japanese manufacturer Komatsu, for example, offers a fee-based smart construction service with its equipment in several Western markets, and has also begun offering monitoring tools to clients in Japan. These include remote monitoring devices that can be attached to equipment made by other companies, allowing Komatsu to access markets in which competing construction equipment manufacturers might have a stronger presence.
Autonomous vehicles move into the market
Highway construction projects in China are adopting driverless technology to improve quality and reduce costs. The country is using unmanned road pavers and rollers on the Panzhihua-Dali Highway. The machines are equipped with GPS technology, radar, and other sensing equipment to determine the best path, and are connected to a remote monitoring center where workers can supervise them and send instructions.
The technology was created by construction equipment manufacturer Xuzhou Construction Machinery Group (XCMG) in partnership with Sichuan Railway Investment Group and Tsinghua University. It allows for the vehicles to operate in complex conditions with very small margins of error, and includes obstacle avoidance, early warning systems, and an emergency stop. The construction project benefits from a guideline made by China’s Ministry of Transport last month that aims to increase the use of advanced technology in road construction and management. The guideline includes 5G communications, edge computing, and the BeiDou Navigation Satellite System as tools to improve intelligent construction sites in the country.
Another company working on autonomous systems for construction equipment manufacturers and operators is Build Robotics. The organization develops control systems with a focus on digging, moving, and placing dirt. These systems can be attached to existing machinery such as bulldozers and excavators, where they make decisions based on data gathered through sensors every second. These sensors include lidar and cameras in order to recognize humans and obstacles, and the system also uses geofencing to keep machinery within the construction site. The tech is being used in remote sites in the US, where it’s monitored by human overseers.
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While autonomous systems and robotics could play a key role in the construction industry in the future, it will be hard for them to find success unless construction workers are on board. In many industries, there is apprehension over robots taking away jobs, and some people are therefore reluctant to adopt this type of new technology. Companies will need to frame their products as new tools rather than worker replacements – something to make jobs easier and safer, and that can help pick up the slack when there aren’t enough workers to be found. Right now, they can be marketed as a way to resume work while maintaining social distancing, as companies around the world are struggling to stay in business and nations are looking to safely restart their economies.
As with many other industries, construction equipment manufacturers face many challenges as the world deals with the global coronavirus pandemic. Several countries are beginning to resume business, but often at a reduced pace and with the possibility of a second wave of the virus in the future. Meanwhile, other nations are still working to slow and stop the spread of COVID-19 within their borders and construction projects are on hold. It’s an important time for innovation as customers look for ways to restart operations while keeping their workers safe.
Discover more about the global construction machinery industry with Technavio’s market research report, including insights such as:
- CAGR of the market during the forecast period 2020-2024
- Detailed information on factors that will drive construction machinery market growth during the next five years
- Precise estimation of the construction machinery market size and its contribution to the parent market
- Accurate predictions on upcoming trends and changes in consumer behavior
- The growth of the construction machinery market industry across APAC, North America, Europe, South America, and MEA
- A thorough analysis of the market’s competitive landscape and detailed information on vendors
- Comprehensive details of factors that will challenge the growth of construction machinery market vendors
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