Hydraulics Market

Market Overview

The global hydraulics market size was valued at USD 47.30 billion in 2023. It is estimated to reach USD 67.90 billion by 2032, growing at a CAGR of 4.1% during the forecast period (2024–2032). In recent years, with exponential population growth and surging urbanization, there has been a subsequent growth of the construction and infrastructure development worldwide, thereby driving the global hydraulics market.

With rising environmental concerns, there is also a significant shift toward the development of sustainable and energy-efficient hydraulic solutions, which is estimated to present a compelling opportunity for market growth.

Hydraulics is an engineering branch that deals with the mechanical properties of liquids, particularly water and oil. It focuses on the transmission of power and control through the use of pressurized fluids. The fundamental principle behind hydraulics is Pascal's Law, which states that pressure applied to a fluid in a confined space is transmitted equally in all directions. This principle enables hydraulic systems to multiply force and transmit it over a distance with great efficiency. Common applications of hydraulics include hydraulic brakes in vehicles, hydraulic lifts in buildings and factories, and heavy machinery like excavators and cranes. Its versatility and reliability make hydraulics essential in various industries requiring precise control and substantial power.

Highlights

• Mobile dominates the type segment
• Hydraulic brake systems segment dominates the application segment
• Construction dominates the end-user segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Hydraulics Market Drivers:

Growth in Construction and Infrastructure Development

The global hydraulics market is significantly driven by the growth in construction and infrastructure development, especially in emerging economies. Large-scale infrastructure projects such as the construction of bridges, highways, airports, and skyscrapers demand robust and efficient hydraulic systems for various applications like excavation, lifting, and material handling.

According to the Global Construction 2030 report, the worldwide construction market is projected to grow by 85% to USD 15.5 trillion by 2030. Moreover, initiatives like India's Smart Cities Mission aim to develop 100 smart cities, further boosting demand for hydraulic machinery. This surge in infrastructure investments and construction activities necessitates the adoption of advanced hydraulic systems, thus propelling market growth. Hydraulic systems' reliability, power, and efficiency make them indispensable in modern construction projects.

Global Hydraulics Market Restraint:

High Initial Costs and Maintenance

The high initial costs associated with hydraulic systems pose a significant restraint to market growth. Hydraulic machinery and equipment, such as pumps, motors, and valves, are often more expensive than their mechanical counterparts, requiring substantial upfront investment. This cost factor can be prohibitive for small and medium-sized enterprises (SMEs) that may lack the capital resources to invest in advanced hydraulic technology.

Furthermore, maintaining hydraulic systems is both costly and complex, necessitating regular inspections, fluid changes, and component replacements to ensure optimal performance and prevent failures. This maintenance burden not only increases operational costs but also requires skilled technicians, adding to the overall expenditure. The combination of these high initial and ongoing costs can deter potential users, particularly in cost-sensitive markets and emerging economies, thereby limiting the overall expansion of the hydraulics market.

Global Hydraulics Market Opportunities:

Sustainable and Energy-efficient Hydraulic Solutions

The increasing emphasis on sustainability and energy efficiency is a significant opportunity in the hydraulics market. As industries worldwide strive to reduce their carbon footprint and adhere to stringent environmental regulations, there is a rising demand for hydraulic systems that offer superior energy efficiency and minimal environmental impact. Innovations such as electro-hydraulic systems, which integrate electric and hydraulic power, are gaining traction due to their enhanced efficiency and lower energy consumption.

Additionally, the development of eco-friendly hydraulic fluids and energy-efficient pumps aligns with global sustainability goals. For instance, biodegradable hydraulic fluids reduce environmental contamination risks, while variable displacement pumps optimize energy usage by adjusting the flow rate according to demand. Furthermore, in January 2024, KYB introduced SustainaLub, a shock absorber hydraulic fluid that is designed to be actually eco-friendly and prevent the potential environmental hazards linked to petroleum. Thus, this growing focus on the development of green technologies presented by manufacturers is estimated to create lucrative opportunities for market growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global hydraulics market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant global hydraulics market shareholder and is anticipated to expand at a CAGR of 4.4% during the forecast period. The region is the fastest-growing market for hydraulics, driven by rapid industrialization, urbanization, and infrastructure development. With their booming construction industries and increasing investments in manufacturing and infrastructure projects, nations like China and India are at the forefront of this growth. The region's favorable government policies and the presence of numerous local manufacturers further bolster the market's expansion.

China's hydraulics market is a dominant player in the Asia-Pacific, primarily due to its extensive industrial base and massive infrastructure projects. China's construction sector was valued at approximately USD 4.7 trillion in 2023, and it continues to expand with projects like the Beijing Daxing International Airport and the South-North Water Transfer Project. Moreover, the country's "Belt and Road Initiative" has spurred significant investments in construction and infrastructure, leading to increased demand for hydraulic equipment.

Additionally, China is the largest market for industrial robots, with sales reaching 167,000 units in 2022. Hydraulic systems are integral to the operation of these robots, especially in heavy industries, thereby driving their demand in this region. Moreover, by 2025, China aims to reduce carbon emissions per unit of GDP by 18% compared to 2020 levels, encouraging the adoption of energy-efficient hydraulic systems.

India's hydraulics market represents another critical market within the Asia-Pacific region, experiencing rapid growth due to its expanding construction sector and industrial activities. Government initiatives such as "Make in India" and substantial investments in infrastructure development, including the construction of smart cities, highways, and urban transport systems, significantly drive the demand for hydraulic equipment. The Indian government plans to invest USD 1.4 trillion in infrastructure development under the National Infrastructure Pipeline (NIP) from 2019 to 2025, thereby driving the demand for hydraulic machinery.

Moreover, India's agricultural sector, which accounts for around 17% of the GDP, increasingly relies on hydraulic machinery for enhanced productivity. The market for agricultural equipment is expected to exhibit a CAGR of 4.5% from 2023 to 2028, fostering the Indian hydraulics market.

Consequently, all these factors are estimated to drive the Asia-Pacific hydraulics market.

North America holds a substantial share of the global hydraulics market, driven by its advanced industrial base and significant investments in infrastructure development. The region is characterized by a high adoption rate of cutting-edge technologies and a strong focus on automation, particularly in the construction and manufacturing sectors. The presence of leading hydraulic equipment manufacturers further bolsters market growth in this region.

The United States hydraulics market is dominant in North America, owing to its robust economy and extensive industrial activities. The country's construction industry is a major driver, supported by substantial infrastructure projects such as highway expansions, airport upgrades, and commercial building developments. For instance, the Infrastructure Investment and Jobs Act, signed into law in 2021, allocates USD 1.2 trillion towards various infrastructure projects over the next decade, significantly boosting the demand for hydraulic systems. The USA's advanced manufacturing sector, including the automotive and aerospace industries, extensively utilizes hydraulic machinery for precision operations and efficiency. Moreover, the presence of major hydraulic system manufacturers like Parker Hannifin and Eaton Corporation, which continuously innovate to meet market demands, further strengthens the US market's position.

Canadian hydraulics market is driven by its expanding construction sector and resource-based industries such as mining and forestry. The Canadian government's focus on infrastructure development, exemplified by initiatives like the "Investing in Canada Plan," which pledges over CAD 180 billion for public infrastructure over 12 years, significantly stimulates market growth. Moreover, there is a rising trend towards using biodegradable and less environmentally harmful hydraulic fluids, driven by stricter environmental regulations and a focus on sustainability. This has resulted in the development of environmentally friendly hydraulics.

For instance, in September 2020, Petro-Canada Lubricants introduced Environ MV R, the initial hydraulic fluid to utilize ultra-pure, severely hydrotreated base oils to comply with the OECD 301B standards for ready biodegradability. This is estimated to drive the hydraulics market in the region.

Thus, the factors above are anticipated to propel the North American hydraulics market.

Segmental Analysis

The global hydraulics market is segmented by type, component, application, and end-user.

Based on type, the global hydraulics market is segmented into mobile and industrial.

The mobile segment owns the highest market share and is estimated to grow at a CAGR of 4.01% during the forecast period. Mobile hydraulic systems find extensive use in vehicles and equipment that operate on wheels or tracks. These systems are prevalent in construction machinery, agricultural equipment, forestry machines, and various types of material-handling vehicles. In the construction sector, hydraulic systems power the movement of excavators, loaders, and cranes, providing the necessary force for lifting, digging, and moving heavy materials. In agriculture, hydraulic systems are integral to tractors and other farming equipment, facilitating functions like steering, lifting, and manipulating implements. Mobile hydraulic systems are crucial for the efficient and precise functioning of forestry machinery, including log loaders and harvesters.

Based on components, the global hydraulics market is bifurcated into motors, pumps, cylinders (welded, tie rod, telescopic, mill type), valves, transmissions, accumulators, filters, and others.

The motors segment dominates the global market and is anticipated to exhibit a CAGR of 2.6% over the forecast period. The motors segment in the global hydraulics market plays a crucial role in various industrial applications. Hydraulic motors convert fluid power into mechanical energy, driving machinery and equipment with high efficiency and precision. These motors are extensively used in industries such as construction, manufacturing, and mining due to their ability to handle high loads and provide consistent torque.

Additionally, the advancements in hydraulic motor technology, such as variable displacement motors, have enhanced their performance and energy efficiency. Moreover, the demand for hydraulic motors is expected to rise, driven by the increasing automation of industrial processes and the need for durable, reliable power sources in heavy-duty applications.

Based on application, the global hydraulics market is divided into roll-offs, compactors, balers, front loader trucks, rear loader trucks, bulldozers, cranes, tractors, forklifts, presses, automotive lifts, hydraulic brake systems, ship steering systems, and others.

The hydraulic brake systems segment is the largest revenue contributor to the market and is projected to grow at a CAGR of 3.98% throughout the forecast period. Hydraulic brake systems use fluid to transfer force from the brake pedal to the brake mechanism. When the pedal is pressed, it pushes a piston in the master cylinder, forcing brake fluid through brake lines to the wheel cylinders or calipers. This fluid movement creates pressure that pushes pistons in the wheel cylinders or calipers, pressing the brake pads against the rotors (disc brakes) or the brake shoes against the drums (drum brakes). The friction generated slows down or stops the vehicle. Hydraulic brakes are efficient and reliable due to the incompressibility of brake fluid, providing consistent and powerful braking performance. They are commonly used in automobiles, motorcycles, and some bicycles.

Based on end-users, the global hydraulics market is divided into refuse, construction, material handling, industrial machinery, agriculture, automotive, marine, oil and gas, aerospace, and others.

The construction segment held the biggest market share and is expected to exhibit a CAGR of 4.2% during the forecast period. The construction segment is a major driver of the global hydraulics market, given the extensive use of hydraulic systems in heavy machinery and equipment. Hydraulic excavators, loaders, cranes, and bulldozers rely on hydraulic technology for efficient and powerful operation. The growth of urbanization and large-scale infrastructure projects worldwide, especially in emerging economies, fuels the demand for advanced hydraulic systems.

For instance, the construction of smart cities and sustainable infrastructure requires high-performance, energy-efficient hydraulic machinery. Innovations such as electro-hydraulic systems are increasingly adopted in the construction industry, enhancing efficiency and reducing environmental impact. This segment is poised for significant growth as global construction activities continue to expand.

Recent Developments

• June 2024- Tenneco, a prominent global supplier of passive and electronic dampers for automotive use, has introduced a cutting-edge hydraulic rebound stop (HRS) system. This system effectively reduces the energy and noise generated by damper rebound topping in electric vehicles (BEVs) and other relatively heavy passenger vehicles, thereby optimizing energy absorption.
• June 2024- Volvo CE India unveiled the latest addition to its lineup, the EC210, a hydraulic excavator in the 20-tonne class. The EC210 excavator is equipped with many innovations that guarantee outstanding performance, remarkable fuel efficiency, and reduced maintenance requirements.

Analyst’s Perspective

As per our research analyst, the future of hydraulics in the construction sector looks promising. Hydraulics are essential to the construction sector, providing the power, precision, and reliability required for modern construction projects. With ongoing advancements and growing demand from infrastructure development, the hydraulic market is set to expand significantly. The use of lightweight and durable materials in hydraulic components will enhance performance and efficiency. However, addressing maintenance, environmental, and cost challenges will be crucial for sustained growth. As technology evolves, the integration of smart and sustainable hydraulic solutions will further enhance their role in the construction industry.