Market Trends of Sweden Construction Equipment Industry
Increasing Government Spending on Construction, Infrastructure, and Mining Sector
- Increasing investment in the country's real estate, commercial, and construction sectors, among others, and the growing mining sector is further aiding the demand for advanced construction machinery across Sweden. Various development projects, such as the National Transport Develop Plan, assist in expanding the construction market across the country, thus, in turn, positively impacting the demand for construction equipment. For instance,
- In January 2023, LKAB, a state-owned Swedish mining company, announced that it had found Europe's largest known deposit of coveted rare earth metals, critical to many green technologies, including electric vehicles, in a far northern part of the country within the Arctic Circle. As the Swedish government formulates a plan to initiate the extraction of these rare raw materials, the mining sector of the country will witness a rapid expansion in the coming years, which in turn will foster the growth of the construction equipment market.
- In June 2022, the Swedish government announced a new national transport infrastructure plan that will witness a record sum of SEK 881 billion (USD 86.6 billion) being spent during 2022-2027. Out of the overall investment envisaged, SEK 165 billion (USD 14.87) will be allocated for the operational and maintenance of the national railway network, and a total of SEK 437 billion (USD 39.38 billion) will be invested to develop the Swedish transport system across all modes.
- Coupled with that, rising investment in enhancing the transportation infrastructure of the nation is expected to boost the construction equipment market in Sweden in the coming years. Various private companies operating across Sweden, such as Electreon, are actively focusing on assisting the government in their strategy for the electrification of road transportation infrastructure across Sweden. For instance,
- In January 2023, Electreon, an Israeli-based startup, announced that it had raised NIS 40 million (USD 11.8 million) to bid on a tender for the construction of the first 42-kilometer (26-mile) long electric road in Sweden. The purpose of the financing was to enable the company to compete in the largest electrification tender in Europe.
- With the government's consistent effort to build a decarbonized public transport infrastructure, along with the support provided by the private construction companies to assist the government's pragmatic plans, the construction equipment market is anticipated to record surging growth during the forecast period.
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Electric Drive Segment of the Market to Gain Traction during the Forecast Period
- The extensive focus of the Swedish government to achieve a carbon-neutral economy is aiding the rapid transformation in various sectors in adopting a new energy ecosystem. With the aggressive strategy adopted by the government of Sweden to achieve a reduction in carbon emissions, there will exist a greater demand for advanced products used in various sectors, which helps in the reduction of carbon content in the environment. For instance,
- The Swedish government has formulated a long-term strategy to achieve no net emission of greenhouse gases into the atmosphere by 2045. Further, the government has also announced that they are active measures to ensure that emissions are lowered by 63% by 2030 compared to 1990 levels. Sweden has also imposed a carbon tax to promote the utilization of new energy. As of June 2023, the carbon tax stood at Euro 122 (USD 130) per tonne of fossil carbon dioxide emitted.
- Total renewable energy capacity in Sweden touched 38,044 megawatts in 2022, expanding at a CAGR of 6.9% between 2018 and 2022. Therefore, with the increasing focus on promoting the utilization of new energy sources, Sweden is recording falling CO2 emissions in the country, which fell to 40.8 million metric tons in 2022, compared to 47.1 million metric tons in 2019.
- With the shifting focus towards adopting a new energy ecosystem, various companies operating in different industries are actively promoting the use of products and equipment to help in air pollution reduction. Construction equipment companies operating in space are investing hefty sums in developing new products that are operated via an electric drive type, which is expected to record surging growth in the coming years. For instance,
- In January 2023, Volvo Construction Equipment, a Sweden-based construction equipment manufacturer, announced the introduction of the DD25 Electric asphalt compactor at ConExpo 2023, making it the first electric product to be developed in the asphalt segment. The company further announced that this specific model will be available to consumers from Q1 2024.
- Further, in January 2023, Volvo CE announced an investment of SEK 65 million (USD 6.3 million) into the production of electric wheel loaders from its plant in Arvika, Sweden, As part of its ambition towards industry transformation through sustainable solutions.
- Moreover, electric construction equipment products being developed by international manufacturers are being made available to Swedish customers via their dealership network operating in the country. With the increasing focus on decarbonization, there will exist a greater demand for electric drive-type equipment in the coming years as more and more construction and rental companies include these products in their fleet, thereby contributing to the surging growth of the electric drive-type segment of the market during the forecast period.
