The Latin America construction equipment market is worth USD 9.5 billion in 2024. It is anticipated to grow at a CAGR of 4.8% during the assessment period and reach a value of USD 15.2 billion by 2034.
| Attributes | Description |
|---|---|
| Market Size in 2024 (E) | USD 9.5 billion |
| Market Size in 2034 (F) | USD 15.2 billion |
| CAGR (2024 to 2034) | 4.8% |
The rise of infrastructure projects in Brazil, Mexico, and Peru is incentivizing investments in construction equipment. The governments in the region are looking to boost construction activities on the back of increasing urbanization
Total construction equipment sales in the region were worth USD 9.1 billion, growing to USD 9.5 billion in 2024, a Y-o-Y growth of 4%. Earth moving machinery remains the highest selling construction equipment in Latam, accounting for 35% all sales.
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Latin America comprises several developing nations, such as Brazil and Argentina. These developing nations are focusing on infrastructure development as a key part of overall development, creating a conducive environment for construction equipment manufacturers in Latin America.
Brazil is one of the major economies in the region. During the first seven months of 2023, the Brazilian government invested about USD 1.4 billion in infrastructure projects. The range of projects in Brazil range from airports to power distribution.
Mexico is another country investing heavily in infrastructure projects. In 2022, the revenue from the construction industry was almost USD 100 billion.
The rising construction investment in Latin America is a result of the government putting more of a focus on infrastructure. Taking note of the rising urbanization, governments in Latin America are concentrating on improving urban housing as well as developing public transportation and spaces in cities.
The following table highlights the steps taken by the governments of various countries in the region to improve construction activities.
| Countries | Infrastructure Initiatives |
|---|---|
| Brazil | Investment in public transportation and renewable energy projects |
| Mexico | Focus on attracting private investments. |
| Argentina | Aim to develop infrastructure through public-private partnerships. |
Companies face economic instabilities due to a number of factors. Primary among them is the constant devaluation of LATAM currencies.
For instance, in 2023, the Argentinian peso depreciated by over 100% against the American dollar. The Brazilian and Colombian currencies are also prone to fluctuation. Consequently, economically-conscious enterprises in the region are hesitant to import construction equipment.
While sustainability measures benefit the construction equipment sales due to the increase in renewable energy projects, they also have the potential to increase costs.
The construction equipment industry in LATAM now has to comply with stricter emission norms, like those introduced by Brazil in 2022, and this compliance cost may be high. An increase in compliance costs has the impact of driving prices.
High interest rates are also a key challenge; for instance, the interest rate in Brazil hovered around 13.75% in 2023. As a result, construction firms in Latin America are less inclined towards buying new construction equipment and prefer renting used equipment.
Latin American construction firms are impacted by fluctuation and gaps in supply. For instance, the pandemic led to bottlenecks in supply, slowing the rate of construction machinery coming to Latin America.
Busy ports like Santos in Brazil saw decreasing traffic. There are questions over the preparedness of the region in terms of another such critical time.
Latin America is also prone to natural disasters like landslides, earthquakes, and hurricanes. For instance, Hurricane Otis in Mexico, cost USD 15 billion in damages. These disasters curb the ability of construction companies to buy advanced machinery.
The region faces the problem of a lack of skilled workers-For instance, the World Economic Forum highlights that Chile suffered from a 12% shortfall in skilled construction workers in 2022.
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Key segments by equipment type include earth moving machinery, such as excavators and loaders, which remain essential for large-scale projects like roadways and industrial facilities. The construction material handling machinery segment, including cranes and forklifts, has experienced growing demand due to rising logistics and warehousing activities.
Meanwhile, the concrete and road construction machinery segment, encompassing equipment like pavers and mixers, is gaining traction due to ongoing investments in transport infrastructure. Looking ahead, sales are likely to be supported by government initiatives, foreign investments, and an increasing focus on sustainable construction practices.
Hydraulic drive systems continue to dominate sales, offering robust performance and reliability across a wide range of applications, from earthmoving to material handling. However, there has been a growing adoption of electric & hybrid drive systems, driven by increasing environmental concerns and a push for sustainable construction solutions. Electric and hybrid equipment are particularly gaining traction in urban projects and areas with strict emission regulations.
From 2024 to 2034, sales are likely to witness accelerated growth in the electric and hybrid segment, fueled by advancements in battery technology, supportive government policies, and the construction industry's commitment to reducing its carbon footprint.
The residential segment of the Latin America construction equipment market has driven demand for smaller, versatile equipment to support urban housing developments and affordable housing projects, whereas the commercial segment has seen robust growth, fueled by investments in retail spaces, office complexes, and tourism infrastructure.
The industrial segment has been a key driver, particularly with the expansion of manufacturing facilities, mining operations, and energy projects, requiring heavy-duty machinery for large-scale operations. Additionally, the institutional segment, encompassing educational facilities, healthcare infrastructure, and government projects, has contributed to steady market growth
The Latin America construction equipment industry is characterized by growing demand for new equipment driven by technological advancements and sustainability initiatives, while the used equipment segment remains popular for cost-effective solutions, particularly among small and medium-scale enterprises.
| Countries | CAGR 2024 to 2034 |
|---|---|
| Brazil | 4.2% |
| Mexico | 3.6% |
| Chile | 5.6% |
Sales are growing with the governments in the region giving a boost to infrastructure projects. The following table highlights projects started by Latin American nations requiring substantial construction equipment.
| Countries | Projects |
|---|---|
| Brazil | Northeast Wind Energy Projects, Transnordestina Railway Project |
| Mexico | Maya Train Project |
| Argentina | Portezuelo del Viento Dam |
| Chile | Atacama Desert solar farm |
| Colombia | Casa Digna, Vida Digna |
| Peru | Pan-American Highway upgrade |
Sales in Brazil are estimated to grow at a CAGR of 4.2% over the 2024 to 2034 period. Brazil is a lucrative market for construction equipment in Latin America, expected to hold 24.4% of the market share in 2024. In Brazil, government programs like Minha Casa Minha Vida (My House, My Life) are boosting construction and leading to greater demand for equipment like compact loaders and excavators.
For instance, the housing expansion in São Paulo for 2023 required the use of over 1,000 new excavators and compact loaders.
Other government projects like the São Paulo metro expansion have also led to heavy use of equipment like boring machines and excavators. The mining industry in the country is also a notable customer. For instance, mining activities in Minas Gerais require >400 HP machinery for iron ore extraction.
Sales are expected to register a CAGR of 3.6% from 2024 to 2034. Mexico is another major lucrative market in Latin America, anticipated to hold 30% of the share in 2024.
Mexican cities like Monterrey and Guadalajara are experiencing rapid growth, leading to escalating urbanization in the country. This has led to greater demand for housing construction equipment, with 101-200 HP excavators being used especially prominently. Hence, growing construction activities in major cities are helping the market progress in Mexico.
Lithium mining is a major industry in Argentina. The continued expansion of lithium mining in Argentina has led to an increase in demand for construction equipment. 200-400, >400 excavators and dump trucks are being utilized heavily in lithium mining sites in the provinces of Jujuy and Salta.
Sales in Chile are anticipated to progress at a CAGR of 5.6%. Construction equipment is used heavily in copper mining across Chile. For instance, the Escondida Copper Mine uses electric loaders and >400 HP excavators significantly. In 2022 alone, the copper mine required the deployment of over 50 hybrid excavators.
Demand is also growing in Chile due to the surge in infrastructure activities in cities. Santiago has witnessed an uptick in skyscraper construction as well as metro projects. These activities have increased the need for construction equipment like truck-mounted cranes.
The government in Colombia is focused on increasing connectivity between urban centers and rural areas. For this purpose, the 4G Road Program has been established, increasing the demand for asphalt finishers and road rollers. The program used more than 500 asphalt finishers and road rollers until 2023.
The development of road infrastructure is complemented by expansion in public transport. In Bogotá, the work of more bus lanes being constructed is handled by electric loaders and articulated dump trucks, among other construction equipment.
Other government programs, like the Casa Digna, Vida Digna Program also drive demand. The housing program drives up demand for compact loaders and concrete mixers. The expansion of ports like Cartagena has seen truck-mounted cranes and articulated dump trucks being employed at greater measure in the country.
Gold and copper mining are increasing in profile across Peru. Mining sites like Las Bambas use >400 HP excavators and articulated dump trucks in significant measure. For instance, in 2023, the mining site required the use of 200 articulated dump trucks. Combined with growing infrastructure projects in the capital, Lima, the market is set to enjoy lucrative opportunities in Peru.
Multinational companies hold higher market share. By improving distribution networks and taking advantage of government support, these companies are building even more of a presence in Latin America. The following table lists major companies and their strengths.
| Company | Strengths |
|---|---|
| Caterpillar Inc. | Strong distribution network |
| Komatsu Ltd. | Diverse construction equipment |
| Volvo Construction Equipment | Sustainability Initiatives |
| Liebherr Group | Customized construction equipment such as harbor cranes |
| Hitachi Construction Machinery | Variety in construction equipment |
| Hyundai Construction Equipment | Concentrating on regional demand |
| JCB | Reputed for its backhoe loaders |
The presence of large companies does not, however, preclude the presence of small and medium-scale players in Latin America. One way through which these players manage to compete with much larger organizations is by raising substantial funding from private sources. The following table highlights the companies that have received private funding in recent times.
| Company | Funding Activity |
|---|---|
| Construex (Ecuador) | Secured USD 4.6 million in seed funding in November 2023. |
| Nuqlea (Argentina) | Raised USD 750,000 in 2024. |
| Obralink (Chile) | Raised USD 2 million in November 2022. |
| Tül (Colombia) | Raised USD 181 million in Series B funding in January 2022 |
Key segments include earth-moving machinery, construction material handling machinery, and concrete and road construction machinery.
The drive type segment is classified into hydraulic, electric, and hybrid.
The power output segment is categorized into the following ranges: less than 100 HP, 101-200 HP, 201-400 HP, and more than 400 HP.
The end-use segment is classified into residential, commercial, industrial, and institutional applications.
The equipment life stage segment is categorized into new equipment and used equipment.
Countries included in the study are Brazil, Mexico, Chile, Colombia, Argentina, Peru, and the rest of Latin America.
Sales are set to reach USD 15.2 billion by 2034.
The market is valued at USD 9.5 billion in 2024.
The market is set to witness a CAGR of 4.8% during the forecast period.
Chile is expected to grow at a CAGR of 5.6% through 2034.
| Estimated Industry Size (2024) | USD 6,846 million |
|---|---|
| Projected Revenue (2034) | USD 10,836.9 million |
| Value-based CAGR (2024 to 2034) | 4.7% |
| Market Size - 2023 | USD 22.72 billion |
|---|---|
| Market Size - 2033 | USD 33.96 billion |
| Market CAGR (2023 to 2033) | 4.1% |
| Market Size (2023) | USD 224.1 billion |
|---|---|
| Market Share (2033) | USD 325.4 billion |
| Market CAGR (2023 to 2033) | 3.8% |
| Estimated Market Value (2022E) | USD 156.4 million |
|---|---|
| Projected Market Value (2032F) | USD 251.9 million |
| Value-based CAGR (2022 to 2032) | 4.9% |
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Latin America Construction Equipment Market
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