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OEM and Construction Equipment Trends 2026: Market Shifts and Talent Impacts
19 Sept, 20254 Minutes
The construction and capital equipment sector is heading into 2026 with a wealth of opportunities, but also some challenges. Global economic uncertainty, tariffs, technological disruption, and growing investment activity are reshaping the landscape for off-highway OEMs.
The global construction equipment market is expected to grow from $170.2 billion in 2025 to $284.1 billion by 2034, at a CAGR of 5.9%. However, growth trajectories are being pushed back, with recovery momentum now more likely to build in 2026.
In this article, we explore major market shifts, from tariffs and product innovation to mergers and acquisitions, as well as the key role of leadership talent in navigating these changes.
Contact CSG Talent to secure the leaders your business needs to succeed.
Tariffs and Trade Pressures Reshaping OEM Supply Chains
How Tariffs Are Impacting OEMs
Recent tariffs have created a climate of uncertainty that discourages investment and delays market recovery. For OEMs, this increases the price of imported parts and makes global supply chains more volatile.
For example, new U.S. tariffs introduced in August 2025 on finished goods containing steel and aluminium are expected to drive costs up substantially as we move into next year. The Construction Equipment Association (CEA) has warned that UK exporters could face additional costs of hundreds of millions of pounds each year if duties apply to the full value of exported machinery.
Even before these tariffs, shipments of UK construction machinery to the U.S. were already down by 40% in value in the first half of 2025 compared to the same period in 2024, highlighting the industry's vulnerability to trade policies.
Strategic Responses from OEM Leaders
Instead of simply absorbing these costs, forward-thinking OEMs are treating tariffs as a catalyst for transformation. By diversifying suppliers and investing in regionalised supply chains, they are creating more resilient models for the future.
This shift demands strategic OEM recruitment and capital equipment recruitment, with leaders capable of navigating logistics, managing new supplier networks, and negotiating regional trade agreements.
Innovation and Electrification Driving Growth
Next-Generation Machinery for Efficiency
Product innovation has become a crucial strategy for OEMs, as companies increasingly seek efficient machinery that can reduce fuel consumption and minimise downtime. With the market facing economic pressures, equipment that lowers running costs is crucial for profitability.
The Energy Transition in Construction Equipment
The energy transition is providing a major opportunity, with electrification and hydrogen-powered machinery rapidly gaining momentum. The global off-highway electric vehicle market is projected to grow from $3.1 billion in 2025 to $6.3 billion by 2032, at a CAGR of 14.5%.
However, the issue of charging and refuelling in remote job sites continues to be a barrier. Some OEMs are now exploring mobile charging units or partnering with energy companies to deliver on-site refuelling solutions. This shift requires construction equipment professionals who understand grid infrastructure, energy storage, and digital systems.
Mergers, Acquisitions, and Private Equity in Capital Equipment
Market Consolidation for Competitive Strength
The current wave of mergers and acquisitions places less emphasis on expansion and more focus on strategic integration. Companies are looking to acquire capabilities in electrification, automation, and digital services to strengthen their operations.
Private equity is playing a key role in this trend. In the first half of 2025, the number of private equity deals increased by 17% compared to 2024, with deal values increasing by more than 40%. This demonstrates the growing influence of investors in shaping the future of the OEM sector.
Investment Priorities and ROI Pressures
These investments come with big expectations, and private equity backers are demanding operational excellence and a quick return on investment. OEMs are under pressure to prioritise R&D that will make money fast, particularly in predictive maintenance and aftermarket services that provide high-margin revenue.
Many acquisitions are also driven by the need to secure software expertise, as OEMs transition from being hardware producers to providers of connected digital ecosystems.
Aftermarket Expansion and Digitalisation in OEMs
The aftermarket has shifted from being a secondary revenue stream to a core strategic focus. As tariffs and inflation keep equipment prices high, customers are looking to extend the lifespan of their fleets, making aftermarket parts, maintenance, and service contracts more favourable.
Digitalisation is accelerating this transformation. The installed base of active construction equipment OEM telematics systems is expected to grow to 12.1 million by 2028 at a CAGR of 12%. Telematics and AI are being used not only to predict maintenance needs but also to support the retention of customers.
By offering subscription-based predictive maintenance, fleet management, and remote diagnostics, OEMs can secure long-term customer relationships that consistently bring in revenue.
How Executive Search Can Close the Leadership Gap in OEMs
The most pressing challenge for OEMs is a gap in leadership talent, as traditional OEM leaders are now being asked to master digital ecosystems, navigate geopolitical supply chain risks, and integrate acquisitions into business strategies.
The pool of talent capable of meeting these demands is extremely limited. Leaders from other industries are in increasingly high demand, such as those from technology, software, and other sectors with complex supply chains and advanced digital ecosystems. This is where an executive search specialist becomes crucial.
Construction Equipment Executive Search Experts at CSG Talent
At CSG Talent, our construction equipment executive search specialists work as strategic consultants to help OEMs identify and attract the next generation of leadership talent. With deep industry knowledge and a global network, we provide the insight and connections needed to build leadership teams that can drive long-term success into 2026 and beyond.
Contact our construction equipment executive search specialists to access top-tier talent and build resilient leadership teams.
