Global Construction Industry Growth

A recent report by Research and Markets provides a detailed analysis of the prospects for the global construction industry up to 2021. The pace of expansion in the global construction industry steadied in 2016, standing at 2.4 percent, but there will be an improvement in the next five years, with growth averaging 2.8 percent. The pick-up will reflect trends in the wider economy; in 2017-2021, the world economy is set to expand by close to 3 percent per year on average.

Despite the uptick, there are a number of key risks on the horizon as well. The most notable is how Chinese authorities will rein in credit growth and manage the ensuing economic slowdown, and how investors in advanced economies will respond to the shift towards monetary policy normalization, particularly in view of the likely pick-up in inflation, as commodity prices bounce back.

In real value terms, global construction output reached $8.8 trillion in 2016, up from $7.9 trillion in 2012.  It will stand at $10.1 trillion in 2021. The value of construction activity in the emerging world surpassed that of advanced economies in 2014, and this difference will continue to widen. Emerging markets will account for 52.8 percent of global output by 2021. Asia-Pacific will continue to account for the largest share of the global construction industry.

The pace of growth will slow, given the relative sluggishness in China's construction industry. The emerging markets of Southeast Asia will invest heavily in new infrastructure projects, supported by private investment.

The overall outlook of the industry shows that contractors will be busy and those that understand the shifts will have the best advantage in the market.

Posted: 7/13/2017 6:44:59 PM