Volatile Trade Policy Mounts Pressure on Construction Equipment Industry, But North America-Centric Growth Continues Unabated
The North America construction equipment market size was valued at $229.9 million in 2024 and is anticipated to reach $ 250.36 million in 2025, and $495.21 million by 2033.
(Photo: SBR)
NEW YORK, July 23, 2025 — Populist government policies that encourage the construction sector, including roads and building works, continue to spur sales of commercial equipment in North America.
However, heavy equipment manufacturers in the US are experiencing pressures, as volatile trade policy is adversely affecting cross-border operations, logistics flows, and profitability.
Despite strong domestic production capacity, manufacturers rely on global imports for key components, especially from Europe and China.
Commercial equipment production has remained steady domestically.
However, export volumes are not so brisk, as fluctuating trade dynamics tinker with demand patterns and reduce competitiveness in overseas markets.
Imports, which maintained a seamless flow until the recent past, have now become financial pressure points in view of rising duties and retaliatory tariffs.
Construction Equipment Emerging
The US alone requires an estimated $4.5 trillion in infrastructure investments by 2025 to tackle aging infrastructure, as per the American Society of Civil Engineers.
Construction equipment includes heavy equipment such as excavators, bulldozers, cranes, and loaders, as well as compact machinery like skid-steer loaders and mini-excavators.
According to the US Census Bureau, over 80 percent of the US population now resides in urban areas, spurring higher demand for residential and commercial construction.
The increasing focus on infrastructure development, particularly in urban areas, is encouraging contractors to invest in advanced machinery that boosts productivity and efficiency.
Notably, in its quarterly report, the American Society of Civil Engineers has laid focus on construction equipment, calling it a promising category.
Among all the construction segments, North America has seen green buildings and sustainable construction practices as a bright opportunity for the commercial equipment market.
While the North America construction equipment market is set for robust growth, it is propelled by the demand for innovative and efficient machinery.
The growth recorded in the construction equipment sector in the US accounted for a lion’s share of North America’s construction equipment market in 2024.
According to the US Bureau of Economic Analysis, the construction industry contributed over $1.4 trillion to the US economy in 2021, highlighting its critical role in economic growth.
Industry experts have attributed this growth to an extensive network of distribution channels and retail outlets, which further supports the growth of the construction equipment market in the US.
As the US continues to lead in construction activity and equipment consumption, it plays a pivotal role in shaping the future of the North America construction equipment market.
Canada and Mexico
The steady growth in Canada, a prominent market for construction equipment in North America, is driven by policies that favor infrastructure development.
Besides, government initiatives aimed at improving transportation networks have also boosted the construction equipment industry.
According to Statistics Canada, the construction industry in Canada generated over CAD 140 billion in revenue in 2021, reflecting a growing demand for construction services and equipment.
Mexico is also emerging as a player in the North America construction equipment market.
The increasing demand for construction equipment in Mexico is driven by significant investments in infrastructure and urban development projects.
The Mexican government’s continuing focus on infrastructure development, including road construction and housing projects, is fuelling higher construction equipment sales.
Moreover, the rise of private investments in construction and real estate has a pivotal role in boosting month-on-month sales of advanced machinery.
Till now, Mexico has maintained a healthy export policy for construction equipment. However, it is a promising country in terms of cross-border trade and is also seen to play a major role in sustainable construction practices.
Industry Challenges
As per industry analysis, the high initial costs of construction equipment are essentially restraining the growth of the North America construction equipment market.
Stringent regulatory norms and safety standards are further proving to be a roadblock in the growth of the North America construction equipment market.
The construction industry is made to follow stringent regulations governing equipment safety, emissions, and operational standards.
According to the Occupational Safety and Health Administration, compliance with safety regulations leads to significant investments in training, equipment modifications, and documentation.
Smaller construction firms, which find it cumbersome to navigate complex regulatory frameworks, are also burdened by the compliance costs.
The stringent rules regarding environmental sustainability are prompting stricter emissions standards for construction equipment, necessitating investments in cleaner technologies.
Manufacturers do whatever it takes to meet these evolving regulations.
However, these companies may face challenges in balancing compliance costs with competitive pricing.
To overcome these challenges, industry players must work jointly to develop clear guidelines and support systems that facilitate compliance while promoting innovation and safety in the construction equipment market.
The imports which maintained a seamless flow till recent past have become financial pressure points in the wake of rising duties and retaliatory tariffs.
Inputs from Saqib Malik
Editing by David Ryder
