Tower Crane Market Anticipated to Touch a CAGR of 5.2 % During the Forecast Period (2022-2027).
A tower crane, equipped with a jib or boom-mounted on the tower structure is typically used in high-risk works involving the movement of heavy materials. The tower crane market comprises many regional players, including manufacturers and suppliers, and was valued at USD 1.88 billion in 2019. It is expected to observe healthy growth during the forecast period, against a backdrop of demand from construction and mining projects and seaports.
The varying import tariffs in tower cranes across economies substantially impact their trade in terms of both value and volume. Countries with the highest tower crane import tariffs are Bermuda (35%), the Bahamas (40.2%), Ecuador (22.1%), Algeria (24.7%), and the Maldives (19.6%), while those with the lowest tariff rates (approx. 0%) are Angola, Kenya, Rwanda, and Tanzania.
The mining industry is crucial to any nation's economy. For instance, mining companies in Australia paid around USD 204 billion in 2016–2017 in taxes and royalties, hospitals, funding schools, and infrastructures across the region. The global mining industry had a positive outlook during2014–2016 and is expected to flourish against a backdrop of upcoming projects in Australia, China, Brazil, and India.
With increasing international trading activities in the last few years, global seaborne trade has observed massive expansion primarily supported by the 2017 upswing in the world economy. Expanding at a rate of 4%, the fastest growth in five years, global maritime trade has gathered momentum, wherein the total volume has reached 11 billion tons, as reported by the United Nations Conference on Trade and Development (UNCTAD). As per to the UNCTAD, over 80% of global trade by volume and more than 70% of its value is carried on ships and handled by ports worldwide. Around 95% of India's trading by volume and 70% by value is done through maritime transport.
Since the 1970s, Asian economies have shown an impressive growth record, but from 2002, they started outpacing the global economy as a whole. Though China and India are the major contributors to the region's growth, Southeast Asian countries are also significantly contributing. Additionally, the relaxation of freight tax in Asia-Pacific, combined with economic growth, is further expected to boost international trading activities.
Various countries have been emphasizing the development of new ports or expanding existing ones to cope up with increasing trade volume and vessel count. Developing intra-Asian trade arising from a shift of low-cost manufacturing activities from China to other neighboring East and South Asian countries is anticipated to generate some additional seaborne trade flows. As China thrives in the global value chain, new trading prospects are opening for other countries. Moreover, China's Belt and Road Initiative has the potential to generate growth and upsurge seaborne trade volumes through increased demand for raw materials and semi-finished and finished products, which, in turn, will accelerate the global port building projects and eventually, drive the tower cranes market.
Government initiatives go a long way in making a country self-sufficient and competitive in terms of export. Population growth in emerging economies has led to mass migration, exerting an enormous strain on the existing urban infrastructure. In order to deal with this, center and state governments have started providing soft loans to spur investment and FDI in the respective country's construction and industrial sectors. As tower cranes are primarily used in construction activities, increasing government investments and the rising demand for building and construction drive the demand for tower cranes globally.
Infrastructure is key to the growth of the Indian economy. The infrastructure sector plays a crucial role in propelling the country's development. The Indian government is playing an active role in helping the industry grow by making favorable legislation and initiating policies that ensure time-bound infrastructure development. As per the World Bank's Logistics Performance Index (LPI) 2018, the country ranked 44th out of 167 countries. Furthermore, the country ranked second in the 2019 Agility Emerging Markets Logistics Index. Significant investments in infrastructure projects have propelled overall investments to around USD 14.5 billion during 2019. Furthermore; India is expected to need investments worth USD 777.73 billion in infrastructure by 2022 to support sustainable development. The country has been garnering significant interest from international investors in the infrastructure space.
In terms of harbor management, flexibility is as important as specialization, and different lifting and lowering mechanical devices and equipment, such as cranes, enable the movement of different weights across several heights from any boat or ship. Many types of cranes are used at ports, with hammerhead cranes as the most common. These cranes have a tall steel tower, which holds a horizontal double cantilever fitted with a lifting trolley that has a crane hook.
Another type is a modern type of balance wrench, which is mostly fixed on the ground. These cranes provide a good combination of lifting capacity and height. They are mostly used to lift loads to very high heights, particularly in shipyard constructions, and to lift containers in havens. Extremely tall cranes can reach up to 1,000 meters high with a base of about 3.5 meters.
Among all end-users, the marine and seaports segment is expected to observe the highest growth rate during the forecast period. The shipping industry offers lucrative opportunities for the tower cranes market with its involvement in so many sectors. The international shipping industry is accountable for the transportation of around 90% of world trade. The United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships provides roughly USD 380,000 million in freight rates in the worldwide economy, which accounts for 5% of the total world trade. As the world's population is on a continuous rise, emerging economies will further increase the demand for raw materials and goods, which need to be transported via ships, trains, etc.
Europe is among the largest exporters of tower cranes. Germany, Italy, Spain, and France are among the leading contributors in the tower crane market. Europe has a massive wind capacity installation that requires the use of tower cranes. Therefore, rising wind capacity installations in Europe are expected to accelerate the demand for tower cranes. In 2019, Europe installed 15.4 GW of new wind power capacity, marking a 27% hike compared to 2018. The region now records 205 GW of wind energy capacity. It has seen some wavering wind turbine installation trends in the past few years, with a total installed capacity of 15.4 GW.
While Spain remained the top installer of new offshore wind turbines with an installed capacity of 22.2 GW, Germany saw a decrease in its installed capacity of onshore wind turbine installations. Sweden and Spain maintained the top spots in installation capacity, and the U.K. saw a sharp rise while the installed capacity in France remained stable. Approx. 55% of the new wind power in Europe is installed in four countries — the U.K., Spain, Germany, and Sweden.
Asia-Pacific is home to some of the most notable high-growth economies, which are key manufacturing hubs and popular tourist destinations. The region attracts investments with its abundant resource reserves and inexpensive labor. It attracted around 45% of global FDI and 52% of global FDI outflow in 2018, as per the UN Economic and Social Commission for Asia Pacific (UNESCAP).
India and China are expected to spearhead growth in the region. The increasing focus on new infrastructure construction and rebuilding old structures in these economies drives construction investments. The value added by the construction sector in India and China, to the global GDP, was around 26.49% and 40.54%, respectively, which is higher than the global average of 25.44%.
As exports are crucial to any economy's growth, the governments of China and India are taking initiatives to strengthen industrialization. Under the Union Budget 2019–20, the Indian government allocated USD 540.53 billion to the infrastructure sector to increase the capacity of the Green Energy Corridor Project, along with wind and solar power projects. India is also observed to be developing its public transportation, with several metro projects slated for completion in the coming years. These projects will also escalate the demand for tower cranes in rapidly and accurately erecting structures.
Tower cranes are an essential part of ports and extensively used in moving and shifting import/export goods. South Korea is one of the leaders in the global export economy and ranks as the sixth most comely economy, as per the Economic Complexity Index (ECI). In 2017, the country exported around USD 598 billion worth of goods and had a positive trade balance amounting to USD 124 billion. The country's top exports included integrated circuits, cars, refined petroleum, and passenger and cargo ships, among others.
Cars, passenger and cargo ships, and vehicle parts accounted for almost USD 83.6 billion. However, the recent COVID-19 pandemic has created a blip on the country's economy and plummeted demand for construction opportunities. Shipping trade is active in South Korea. As per the Observatory of Economic Complexity, passenger and cargo ships are the 59th most traded product and the 742nd most complex product.
South Korea is the topmost exporter of these ships, accounting for 50% of the total exports, with a net value of USD 24,400 million. Tower cranes are used while building ships. Almost 80% of global trade by volume and more than 70% of its value is carried on-board ships and handled by seaports worldwide, which emphasizes the significance of maritime transport for trade and development.
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