The construction industry has experienced some global challenges in recent years. Most notably, the COVID-19 pandemic had a strongly negative impact on the sector during 2020 and 2021. As the virus spread, governments around the world were forced to instigate restrictive measures on their populations to slow the spread of COVID-19 and protect key healthcare infrastructure from overload. This took the form of regional and national lockdowns and other restrictions on the free movement of citizens. This was damaging for the construction industry as it relies on human workers to be present on-site to undertake the range of building activities. It is little surprise that the industry shrank in size during this period and is only now beginning to fully emerge from the shadow of the pandemic.
However, it is estimated that emerging markets now account for approximately half of the value of the global construction industry. These emerging markets are characterized by healthy economies that are fuelling growth across the countries and with it a demand for increasingly large-scale construction projects. It follows that emerging markets with a growing construction sector will have a greater need for construction machinery, fuelling the market for such equipment. This article focuses on China and Vietnam, two markets that are predicted to enjoy growth in the construction sector and thus create increasing demand for construction machinery.
China
It is recognized that China was one of the few countries that recorded growth in their construction industry during the pandemic that began in 2020. During this year, China enjoyed an impressive rate of 3.5% growth in the construction sector when other countries were stagnant, if not in decline. It is expected that the construction industry in China will grow by 4.4% between 2024 and 2027. For a country of China's size, this will undoubtedly create additional demand for construction machinery. Heavy machinery manufacturers and suppliers are already taking note of this fact. While many companies still focus on established markets in the US and offer heavy equipment for sale in Michigan and other states that have a strong construction sector, some will likely now focus more on China. Exporting specialized construction equipment to China may be seen as a key market for many larger firms. However, it is important to note that the country has a range of established construction equipment companies, which will lead to stiff competition in some areas that are already supplied domestically.
Vietnam
While construction in Vietnam suffered due to a resurgence in the COVID-19 pandemic in 2021, the government has instigated a package that aims to stimulate economic recovery. This $35 billion plan has a clear focus on the promotion of infrastructure development and will likely create demand for heavy construction equipment that is used in the development of road networks and the construction of new commercial and industrial infrastructure. Vietnam is a country that has welcomed overseas investment for several decades, and the south of the country is becoming increasingly Westernized. As the manufacturing industry continues to expand in Vietnam (which has formed the backbone of the export-orientated economy), there will likely be increased demand for heavy construction equipment that is required to build new and modern factory premises.
