A newly released report titled ‘Global Construction 2030’ forecasts the volume of construction output will grow by 85% to US$15.5 trillion worldwide by 2030, with three countries – China, US and India – leading the way and accounting for 57% of all global growth.
The benchmark global study – the fourth in a series from Global Construction Perspectives and Oxford Economics – shows average global construction growth of 3.9% pa to 2030, outpacing that of global GDP by over one percentage point, driven by developed countries recovering from economic instability and emerging countries continuing to industrialize.
Construction work continues on the building known as 3 Manhattan West, in New York. When completed in 2017 it will be 62 stories and will have 844 apartments. U.S. construction spending rose 0.6 percent in September to the highest level since March 2008, pushed up by a surge in apartment building. (AP Photo/Mark Lennihan)
“China’s share of the world construction market will increase only marginally as growth slows in the world’s largest construction market to 2030. In comparison, US construction will grow faster than China over the next 15 years – growing by an average of five percent per annum. Meanwhile, we’re due to see a surge in construction rates in India as it overtakes Japan to become the world’s third largest construction market by 2021,” says Graham Robinson, Executive Director, Global Construction Perspectives.
China construction growth is to slow considerably with a slump in housing and the first ever decline in housing output for China will be registered this year. But, its transition to a consumer and services driven economy provides opportunity for growth in new types of construction in healthcare, education and social infrastructure, as well as retail and other consumer end-markets.
The report says that the construction market in India will grow almost twice as fast as China to 2030, providing a new engine of global growth in emerging markets. India’s urban population is expected to grow by a staggering 165 million by 2030, swelling Delhi by 10.4 million people to become the world’s second largest city.
“Although globally we see construction growing more rapidly than the overall economy, with developed markets forecast to rebound from their depressed levels, many will not be back to their previous peak levels, even by 2030. The current weakness in most emerging countries is likely to be temporary, with higher growth rates soon returning,” says Mike Betts of Global Construction Perspectives.
In the US construction growth will tilt towards the southern states, reflecting the region’s greater catch-up potential and higher population growth.
“Fed lift-off, expected as early as December, could mean a risk for construction growth in key emerging markets – Brazil, Russia, Turkey and India – that could all suffer from significant short-term reductions in growth for construction, with some of these countries potentially halving growth,” says Jeremy Leonard, Director of Industry Services, Oxford Economics.
“Whilst there is an interesting relationship between the top three countries, it is important not to forget that we see significant weakness in Brazil and Russia, whilst we see extraordinary growth in Indonesia. In Latin America, we expect Mexico to overtake Brazil, whilst Indonesia will overtake Japan by 2030, says Jeremy Leonard, Director of Industry Services, Oxford Economics.
Brazil risks a ‘lost decade’, as the stranglehold of excessive bureaucracy and the Petrobras scandal continues to hold back the economy and investment. The strong demographics that supported Brazilian growth are reversing, leading to stagnation in demand for construction over the longer-term.
When it comes to Europe, whilst it won’t recover to reach pre-crisis levels until 2025, the UK is a stand-out growth market, overtaking Germany to become the largest in Europe and the world’s sixth largest construction market by 2030.
“Construction is likely to be one of the most dynamic industrial sectors in the next fifteen years and is utterly crucial to the evolution of prosperous societies around the world. The numbers within this report are huge and that translates as creating vast numbers of new jobs and creating significant wealth for certain countries across the globe,” says Fernando A. Gonzalez, Chief Executive of global building materials company CEMEX.
For more information, visit website: www.globalconstruction2030.com.
