The economic growth engines running across all countries worldwide have been changing the face of landscapes across them. The economic growth of a country, in a way, determines the ability of the respective government to spend on infrastructure and on other fronts. Since individual income taxes, corporate taxes, and payroll taxes among other taxes and duties make up a government’s earnings, to increase its spending on infrastructure and other sectors, governments need to increase the collection of revenue from any or all of these sources. While the economic growth of a country can be mapped by looking closely at the growth of various sub-sectors, physical infrastructure in a country is also a key indicator. Infrastructure developments drive with them the growth of many markets, both small and large, which are aligned or tied closely to their growth. An instance of this is the growth of dumper truck market, which is tied closely to the development of infrastructure across countries. A dumper truck, which is also referred to as a tipper truck or dump truck in many parts of the world, is a heavy commercial vehicle, which usually includes a big and flat bed, and a hydraulic system under it. The big-box-like bed carries the weight of the dumps like gravel, sand and others, and the hydraulic system underneath lifts up the bed from one side in a way that dump is deposited at the designated spot behind the truck.
The dumper truck market growth is majorly attributed to increasing spending by many countries into infrastructure development. Since many developed economies already have a mature road and highway infrastructure, the spending by governments on infrastructure development across them is limited. A major chunk of the market growth comes from spending into infrastructure across many developing countries. India, for instance, has been witnessing the pouring of huge investments by the government into infrastructure over the past two decades. The figure below shows the inflow of investments into road infrastructure in India from 2004 to 2015.
India Infrastructure Investments, Road, 2004 to 2015, Euro Billion
Source: Organisation for Economic Co-operation and Development
The sector has managed to retain a healthy growth and the flow of investments into construction of new roads and highways still continues to increase. According to a data from Invest India, an investment promotion and facilitation agency under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India., 10, 800 km of highways was constructed in the country during 2018-19 and the government has plans to expand the network of national highways to over 200,000 km. Under its Bharatmala Pariyojana, the government plans on constructing 66,100 km of expressways, economic corridors, and border and coastal roads, the first phase of which is poised to bring in investments worth $82 billion by 2022 and add 34,800 km to the total highway network. China is another economy which has been pumping huge investments into infrastructure development. A significant share of these investments is attributed to the China’s Belt and Road Initiative (BRI) which includes, but is not confined to, construction of an economic belt which connects the country with Southeast Asia, South Asia, Central Asia, Russia and Europe by land. As many other countries across regions like Asia Pacific, South America and Middle East and Africa continue to witness an increase in spending into infrastructure, the demand for construction machinery will also increase. While these regions will continue to witness a fairly heavy flow of investments into infrastructure, this does not mean that the countries in Europe and North America do not contribute to the total spending globally. Ageing infrastructure in the United States and in many countries across regions has been attracting investments by governments into renovation and repair. Since ageing infrastructure poses a significantly high risk to life and property, governments tend to ensure that the renovation work for such infrastructure begins before any severe damage is done. These developments are driving with them the demand for heavy construction machinery. Since dumper trucks play a key role in this sector, these developments are driving their demand, thus augmenting the market growth. The market growth is being further driven by high consumption of coal, for various applications, worldwide. He figure given below shows the global consumption volume of coal:
Global Coal Consumption, in MTOE
Source: International Energy Agency (IEA)
Although many countries across the globe are moving continuously towards cleaner sources of energy, the demand for coal is expected to witness some impact. For instance, rapidly growing popularity of solar energy worldwide is driving the growth of the renewable and clean energy sector. According to Knowledge Sourcing Intelligence estimates, the global solar PV glass market is expected to witness an impressive growth over the next five years. The estimates show that the market is anticipated to grow at CAGR of 24.60% between 2020 and 2025, and is expected to reach a total size of US$26.848 billion in 2025 from US$7.175 billion in 2019. Although demand for energy is also witnessing a continuous increase, the demand for coal will still remain significant but it is expected to witness some erosion due to the shift towards cleaner sources of energy. Stringent regulations in place regarding preventing environmental pollution, and their strict enforcement in many countries will also continue to steer some end users away from coal to other sources of energy. Yet, the global demand for coal is expected to remain significant over the next five years, and better cost-efficiency offered by a wide range of dumper trucks in the market will continue tom drive their adoption among customers, thus propelling the market growth.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.