The global construction industry is expected to grow at an average annual rate of 3.9% over 2016-2020, according to a report by Timetric’s Construction Intelligence Center (CIC).
The industry has regained growth momentum worldwide, with expansion accelerating from an annual average of 2.7% a year in real terms in 2011–2013 to 3.1% in 2014. CIC forecasts a further rise to 3.8%% in 2015, and then an average annual increase of 3.9% in 2016–2020.
Based on the CIC’s Global 50, a grouping of the 50 largest and most influential markets in the world, the construction sector is projected to grow from US$7.4 trillion in 2010 to US$8.5 trillion in 2015, and to US$10.3 trillion in 2020, when measured at constant 2010 prices and exchange rates.
The construction industries in emerging markets are forecast to continue to grow at a much faster rate than the advanced economies. With reference to the CIC Global 50, emerging markets accounted for more than half of the world’s construction output for the first time ever in 2012, and by 2020 it will have a 56% share.
From 2016-2020, the construction industries in advanced economies combined are forecast by CIC to expand by 2.2% a year on average, while emerging markets will record a 5.3% annual expansion during the same period. However, the advanced economies are at least improving, with growth accelerating from just 0.6% a year on average in 2011-2015.
The construction industries in the Middle East and Africa region are predicted to be the fastest growing in 2016-2020, overtaking the Asia-Pacific region, which held the top spot in 2011-2015. This reflects the huge investment in infrastructure and buildings that is taking place in countries such as Qatar, Saudi Arabia and the United Arab Emirates (UAE), while the slowing rate of growth in China’s construction industry is said by CIC to be a key factor driving the deceleration in Asia-Pacific. However, Asia-Pacific’s share of the global construction industry will continue to rise, reaching close to 49% in 2020, up from 40% in 2010.
The precarious state of the Eurozone, which has intensified following the election of an anti-austerity party in Greece, will continue to undermine investor confidence in the region, according to CIC. However, in general the worst is said by CIC to be over for the region’s construction industry.
A synopsis of the new CIC report states: “Many of the countries that had suffered double-digit declines in construction output in the wake of the financial crisis are now turning a corner and starting to grow again. However, reflecting the extent of the decline, it will be after 2020 that the construction industry in Western Europe will return to the pre-crisis levels. The US will also fail to surpass its pre-crisis high by 2020.”
