Do you remember playing with toy forklifts as a kid? If so, you'll find today's topic—construction machinery companies—quite familiar. These companies manufacture heavy equipment for construction, like forklifts, excavators, and cranes. They are essential in various sectors, from urban infrastructure like roads and buildings to mining and agriculture.
Why Construction Machinery Matters
The demand for construction machinery rises as more construction projects get underway. The industry is significantly influenced by national infrastructure policies and investment climates. The world is currently experiencing a massive construction boom, making it an excellent time to focus on the construction machinery industry.
Global Factors Fueling Growth
👉 U.S. Infrastructure Investments
The Biden administration is ramping up infrastructure spending to boost the economy. According to Blue Wave Consulting, the construction machinery market in the U.S. is expected to grow at an annual rate of 6% through 2028.
👉 Saudi Arabia's Neom City
Saudi Arabia is building an eco-friendly city called 'Neom,' as part of their Vision 2030 initiative. The project, 44 times the size of Seoul and costing $500 billion, is expected to surge the demand for construction machinery.
👉 Reconstruction in Ukraine
A year after the Russia-Ukraine conflict, Ukraine is planning significant reconstruction efforts. It's considered the largest reconstruction project since WWII, offering both opportunities and risks for related companies.
Top Players in the Industry
👉 Doosan Bobcat
The construction machinery arm of Doosan Group, it is a significant beneficiary of U.S. infrastructure investments. Its Q1 operating profit rose by 90.2% YoY, recording 369.7 billion KRW.
👉 HD Hyundai Infracore
This company is second in market capitalization in Korea and is expanding its presence in the Middle East and Africa. Its Q1 operating profit grew by 45.5% YoY, amounting to 152.6 billion KRW.
👉 HD Hyundai Construction Equipment
Another subsidiary of Hyundai Heavy Industries Group, it is the third largest in Korea by market cap. Despite concerns over its performance in China, it has seen a 71.3% YoY increase in its Q1 operating profit, recording 80 billion KRW.
Conclusion
The construction machinery industry is currently in a promising state, thanks to the global construction boom and significant infrastructure projects worldwide. For those interested in this sector, now might be an excellent time to invest. Keep an eye on the major players and consider the variables in ongoing international projects.