London, 2nd October 2024 – The global market for mobile hydraulics is projected to contract by 6.7% in 2024, according to the latest market study by Interact Analysis. This downturn follows a period of significant growth in 2021 and 2022. The market is now expected to be valued at $17.5 billion by the end of 2024, down from $18.8 billion in 2023. However, the global mobile hydraulics industry is expected to return to growth in 2025 with 2024 seen as a turning point for the market.

The Americas region is expected to experience the largest contraction in the mobile hydraulics sector in 2024, with all the tri-regions expected to return to growth in 2025

Economic uncertainty, including high borrowing costs and political instability globally, is a major factor contributing to the market’s current decline. Coupled with over-stocking during the supply chain crunch of 2021 and 2022, this has led to a period of destocking by OEMs (Original Equipment Manufacturers) and distributors, further slowing the market in 2024.

Economic uncertainty, including high borrowing costs and political instability globally, is a major factor contributing to the market’s current decline. Coupled with over-stocking during the supply chain crunch of 2021 and 2022, this has led to a period of destocking by OEMs (Original Equipment Manufacturers) and distributors, further slowing the market in 2024.

Construction and agriculture in decline, APAC buoys sector

The global construction sector’s poor performance is dragging down the overall market in the Americas, which represents 46.5% of the region’s mobile hydraulics revenue. Europe is experiencing declines across all sectors due to economic challenges, including higher energy costs precipitated by the conflict in Ukraine and a de-coupling of Europe from Russian natural gas. The Asia-Pacific region is expected to post the highest compound annual growth rate (CAGR), driven by strong demand in the material handling and mining sectors.

Sectors like material handling and on-road commercial vehicles will see stronger recovery, with the latter forecast a CAGR of 3.6% from 2023 to 2029

Vehicle electrification will reshape the market

While the immediate outlook for the mobile hydraulics market is challenging, there are longer-term trends that offer significant growth potential. One of the most important of these is the ongoing trend toward electrification, particularly in the off-highway vehicle market as many OEMs flag 2030 as a key date for their sustainability plans. Although full hydraulic system replacement is unlikely in most high-power applications, electrification is expected to drive significant changes in system design. Decentralized hydraulic systems, which can improve energy efficiency, are likely to become more prevalent, helping OEMs meet stricter emission and efficiency targets. However, the hydraulic valve market could be negatively impacted as fewer are needed in a decentralized or fully electric system.

Cyclical nature of growth

The current downturn in the mobile hydraulics market can be attributed to several converging factors, most notably the global economic climate and a widespread effort to reduce overstocked inventories. In the wake of supply chain disruptions seen in 2021 and 2022, many OEMs and distributors significantly over-ordered hydraulic components to mitigate potential shortages. This led to an overstocking scenario, which combined with a slowdown in demand to cause destocking, and this is weighing heavily on the market.

However, the United States Federal Reserve’s interest rate cuts are likely to kickstart a new cycle of growth for the mobile hydraulics sector. The US dollar has long been the lynchpin of the global economy and any reduction in interest rates often results in market growth around the world.

Blake Griffin, Research Manager at Interact Analysis, comments: “While a decline is unfortunate, such slowdowns have become expected in the mobile hydraulics market, which can be characterized as extremely cyclical. A typical cycle will see growth peaking and troughing every 3 to 5 years. The last peak was 2021, where growth was in the double digits. This growth has slowed since then and we expect 2024 to represent the trough of the current cycle, with growth returning in 2025.”

About the Report: 

In this report, we provide detailed market size and forecast data for the mobile hydraulics market by product, industry, vehicle type, and region. In addition to this analysis, we conducted a market share analysis of any vendor in the market with a greater than 1% share. This report continues to explore the impact electrification of off-highway vehicles is having on the mobile hydraulic market.

With each edition, we strive to improve our research methodology and enhance our knowledge base to provide our clients with the most relevant and high-quality insights into the market. Since our first edition of this report, we have gained more insight into mobile hydraulic products as well as the off-highway and commercial vehicles sectors. Interact Analysis now produces dedicated reports on electrified off-highway vehicles, electrified off-highway equipment pricing & architecture, hybrid and electric trucks and buses, and forklifts.

About Interact Analysis 

With over 200 years of combined experience, Interact Analysis is the market intelligence authority for global supply chain automation. Our research covers the entire automation value chain – from the technology used to automate factory production, through inventory storage and distribution channels, to the transportation of the finished goods. The world’s leading companies trust us to surface robust insights and opportunities for technology-driven growth. To learn more, visit  www.InteractAnalysis.com.