It is important to know about the global construction industry trends. Here is what you need to know.
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Facts About Global Construction Market Trend
The top global service providers are GS Engineering & Construction, Skanska AB, McConnell Dowell Corp Ltd., Fluor, Cimic Group Ltd., Strabag, Obayashi Corp, PCL Construction Enterprises Inc, Vinci, and Consolidated Contractors Group according to Beroe, the procurement intelligence experts. At present, the global construction industry size is $5.29 trillion in the Asia Pacific, $2.88 trillion in Europe, $2 trillion in North America, and$0.48 trillion in the Middle East –Asia. During the four years between 2014 and 2018, the construction industry market size increased at a compound annual growth rate of 6.1%. The African construction industry currently values at about $210 billion.
Many global construction industry trends have had an impact on the market in the past and these are likely to impact the construction industry market size in the future too. For example, regulation, compliance, and transparency are required to ensure the industry’s reputation is improved. Another trend is innovation. As new opportunities for innovation are explored these can impact the cost and sustainability of construction in the future. Internationalism, sustainability, and competitive dynamics can have an impact on the entire global construction market. These global construction industry trends are important to find out about the short and long-term future.
The construction industry market size is going to grow even if it happens at a slower pace than was expected. However, since the long-term outlook is positive in the global construction industry, there are chances that the growth will be more than the global GDP growth in the coming years. The global construction market will grow depending on several factors. Some of them are infrastructure upgrades especially in developing nations, population, residential development, and investments.
According to Beroe, North America’s output will depend on the non-residential construction activities that are prevalent in the region. For example, healthcare and education are two such activities. There is expected to be stable growth in North America due to these. In Europe, the construction industry market size took a hit due to Brexit. This was in 2016 when the labor cost increased. While the construction output has taken a hit there is expected to be stable due to new projects that are in the pipeline. For example, Germany and Italy are providing more growth opportunities in the industry.
The construction industry market size is increasing in the developing regions. In South America, there is slow growth but it is still taking place. Colombia and Argentina are showing better growth than Brazil which has a construction industry that is decreasing. Argentina and Colombia have a strong demand which is why they are growing. APAC’s contribution to the global construction market will reach 45% by the end of 2020. The key driver in India and China will be a construction that is more consumer-oriented and the rise in demand for it will ensure that there is steady growth in this industry.
Brexit is an important factor to consider because of how it will continue to affect the construction market. Policy changes are expected which means there might be changes in the FDI investment. EU provides about 15% of the construction labor in the UK. This means that the construction projects that are upcoming will get affected as a result.
Forecast Of Developing Regions
By 2022, Beroe estimates that the global construction market will grow at an average rate of up to 4%. By 2023, the industry can grow even further. APAC and LATAM will more likely contribute to more than 50% of the global output by the end of 2020. Emerging markets such as Australia, India, China, Vietnam, and Indonesia will have significant growth in the coming years. It has been estimated that even the African construction market will value up to $300 billion by the end of 2021. India and China, in particular, will make contributions of over $50 trillion to the global construction market by 2030.
Forecast For Developed Regions
It has been forecasted by Beroe that North America’s construction industry will grow by at least 4% or 5%. This will be due to the increase in public construction activities and industrial construction activities. Residential construction activities can have a positive impact too as the demand for these is likely to increase. Outsourcing models such as integrated project delivery is another major trend and it can have a positive impact in the US especially because of its various benefits. Moreover, the use of technologies is likely to have an impact on the construction industry market size as it will increase in the developed regions.