Concrete Transport Truck Market: Since a Smarter World Needs a Concrete Foundation
The construction industry strongly affects the economy, the environment, and the society as a whole. This industry serves almost all other industries as all economic value creation occurs within or by means of buildings. According to the World Economic Forum (WEF), the construction industry accounts for 6 per cent of global GDP and is the largest global consumer of raw materials. Construction companies have been positioned as active participants in building a smart and connected future. With construction spending rising across the globe, overall market growth is expected to continue in the near future. While revenues across this industry are steadily rising, the industry is still facing challenges of sustained cost pressures, and ongoing labor shortages. Despite all these challenges, E&C (engineering and construction) firms are expecting several significant opportunities in the global construction industry- supportive government policies and initiatives and smart city mega-projects to name two.
Governments as well as global organizations are implementing various policies and programmes to boost the construction activities. Growing global population is putting pressure on governments to provide affordable housing to each and every person across in different countries/regions. According to the World Bank data, the global population has surged from 6.922 billion in 2010 to 7.674 in 2019.
Global Total Population Data, in Billion, 2010 to 2019
Source: The World Bank
In order to manage this rising housing shortage, governments are implementing various housing policies. For example, the British government is providing funding to support the country’s housing market through initiatives such as the Funding for Lending Scheme and Help-to-Buy Equity Loan Scheme. NAB, one of Australia’s biggest banks, has pledged to support affordable and social housing initiatives in the country over the next three years with an investment of $2 billion in order to tackle homelessness and increasing access to secure accommodation for vulnerable people. This rising construction of houses will continue to drive the market growth of concrete transport truck worldwide.
As the global population continues to concentrate in urban areas, supported by expansion of IoT and other advanced technologies and solutions, smart cities are increasingly viewed as the holy grail toward easing the damaging effects of growing urbanization. With continuous investments, both public and private, being funnelled in the expansion of smart cities, construction activities will also experience an uptick during the next five or ten years. In Philippines, New Manila Bay City of Pearl holds promising reclamation project which will be funded and developed by a consortium, led by local company UAA Kinming Group Development Corp. along with a global mix of partners from Europe, Southeast Asia, Hong Kong, China, and other regions/countries. The Government of India has planned to invest US$30 billion for the 89 cities under the Smart Cities Mission.
Rising number of manufacturing facilities in various industries is further boosting the construction activities worldwide. Companies across various industries such as chemical, pharmaceutical, automotive, and electronics are spending their R&D as well as production facilities so as to better serve their customers in different locations while reducing cost of transportation from one location to another. Moreover, many countries are providing several tax exemption benefits to companies which set up their plants in their geographic area in order to boost their own GDP. The Brazilian government, for instance, is aimed at strengthening semiconductor and electronics manufacturing in the country. Brazilian taxation policies allow domestically produced goods including appliances, computers, and telecommunication equipment to be taxed lower than what is levied on imported ones. It also provides exemption to companies that invest in the country’s semiconductor production including exempt from federal taxes (COFINS, PIS, and ISS) and discount on municipality taxes. Countries like the U.S. are also taking rigorous measures to ramp up their domestic manufacturing. The replacement of NAFTA (North American Free Trade Agreement) by USMCA (United States-Mexico-Canada Agreement) has made it mandatory for automakers to manufacture 40% of their motor vehicles in facilities where assembly workers earn minimum US$16 per hour. Since the average wage in Mexico is relatively lower than that the set criteria, it will encourage U.S. automakers, who early shifted their production facilities in Mexico due to lower production costs, to shift back to the country. As a result, there will be expansion of automotive plants in the country in the coming years.
Growing competition among firms across several industries is calling out for more and more investments in research and development projects. In Germany, more than 60 per cent of chemical companies are involved in research activities, with R&D spending exceeds €11 billion each year. the UK government has recently announced to increase its investment in R&D to £22 billion annually by 2024-25, almost doubling the £11.4 billion spent in 2020 so as to place the country among the top quarter of OECD nations. The UK-based global CDMO, Sterling Pharma Solutions, invested US$1.5 million in 2019 into a phased expansion of its U.S. facility in North Carolina over the next three years. The company has plans to expand its cGMP production suites, its QC laboratory, and expand the site’s R&D capacity.
World’s Top 10 Leaders in R&D Investment, R&D Expenditure (Latest Available Data), Billion PPP$
Source: UNESCO Institute for Statistics
However, the recent global pandemic outbreak caused by the spread of COVID-19 has brought the construction work to a near standstill which, in turn, has severely impacted the demand for concrete transport trucks. Mandatory government lockdowns and social distancing measures has shifted the E&C industry on the wrong side of the curve, with construction sites in many countries being shutdown. Reduced economic activity leads to a decline in demand for new commercial or industrial facilities. Loss of income along with lack of consumer confidence has negatively affected the demand for both housing construction and renovation. On the supply side, global supply chain disruption in building materials have also suspended production and distribution. In the coming future, E&C industry need to find new ways to survive this pandemic as it will take time to wash off the negative impact of this pandemic while walking on the track of economic recovery.
ABOUT THE AUTHOR:
Anjali Joshi is a senior market research analyst at Knowledge Sourcing Intelligence. She oversees a team of analysts and is known for the quality of market intelligence she delivers to the clients which range from start-ups and Non-profit Organizations to Fortune 500 companies. Anjali’s keen understanding of international business and market dynamics, coupled with her years of experience working in this industry, allows her to analyse current and future trends across both global and clients’ target markets and help them in making informed decisions.
