Compact Construction Equipment Market Set to Hit $56 Billion by 2032 with Mini Excavators Leading the Charge

The compact construction equipment market is booming. According to a new report from MarketsandMarkets, the industry will expand from $39.52 billion in 2025 to $56.05 billion by 2032. That’s a 5.1% compound annual growth rate (CAGR), fueled by infrastructure investment, urban expansion and technological innovations. It’s an exciting prospect, especially for American contractors who continue to embrace compact machinery from track loaders and mini excavators to utility vehicles and compact wheel loaders.

Why Compact Equipment Is on the Rise

Several key factors are driving this growth:

• Residential and Infrastructure Projects: Increased housing demand and infrastructure spending, particularly in North America, are pushing demand for compact machinery.
• Technological Advancements: Automation, telematics and electrification make compact equipment more efficient, appealing and versatile.
• Versatility and Affordability: Compact machines fit into tight spaces, handle multiple attachments and offer lower purchasing, rental and operating costs.

Mini Excavators: The Market Leader

Mini excavators will claim the largest market share by 2025, according to the report. Their ability to operate in diverse terrains, fit into confined spaces, handle heavy loads and take various attachments makes them indispensable for excavation, grading, demolition and a zillion other jobs beyond. There are already over 20 brands of mini excavators in the North American market today, but the report notes Kubota Corporation (Japan), Kobelco (Japan), and Caterpillar (US) lead the global market. According to the press release promoting the report:

Industry experts say <60 HP mini excavators are preferred for residential applications worldwide. Hence, the growing investments in the residential sector will drive the demand for mini excavators during the forecast period.

Electrification is also gaining traction. Many OEMs, including Volvo, JCB and Takeuchi, are introducing electric-powered mini excavators to meet growing demand for zero-emissions equipment. Right now, I would say the mini excavator sector has the most penetration when it comes to electrification of earthmoving equipment.

Compact Track Loaders and Skid Steers: High-Power Growth

Machines with 61 to 100 hp are set to experience the fastest growth, according to the report. This category includes skid steers, backhoe loaders and compact track loaders, which are essential for large-scale projects. From the press release:

This power output range is preferred in construction equipment because it can meet high torque and power demands. The demand for this range of equipment is particularly strong in Asian countries, driven by large-scale infrastructural development projects like roads, commercial complexes, and smart city projects.

North America Leads the Market

According to the report, North America is the largest market for compact construction equipment, driven by increasing residential construction and infrastructure projects. In 2024, the U.S. approved 1.48 million building permits, with housing construction up 2.6 percent year-over-year. Canada and Mexico are also seeing significant growth, fueled by rising investments in construction. In America, a lot will depend on the Trump administration. From the press release:

The return of the Trump administration in the United States can have several significant impacts on the construction equipment market in the region. One of the key promises of Trump’s previous administration was a major push for infrastructure development, including roads construction, reconstruction of bridges and airports. The previous trump government also focused on imposing lower taxes on businesses and a more pro-business environment, which could lead to increased investments in both public and private infrastructure, creating demand for construction equipment. The negative factors from the new government maybe, Trump’s previous administration imposed tariffs on a variety of products, including steel and aluminum, a similar return to these types of trade policies is expected, which will increase the costs of raw materials used in construction equipment manufacturing, such as steel and copper.

Final Thoughts

The compact construction equipment market is on an upward trajectory. Mini excavators and compact track loaders are leading the charge. As urbanization and infrastructure projects grow, so will demand for these nimble, powerful, attachment-taking machines.

Keith Gribbins is publisher of Compact Equipment.