The value of the global construction market is predicted to increase by $8000bn to $15,500bn by 2030, according to the recently released report 'Global construction 2030' compiled by industry analysts Global Construction Perspectives and economic consultancy Oxford Economics. China, India and the US will lead this growth, with the UK predicted to become Europe’s largest construction market over the next 15 years.
The projected growth drivers reflect current market trends: China, which is currently experiencing an economic slowdown, will be surpassed by the US, whose construction market is expected to outpace China’s in terms of growth over the next 15 years. India, named this year’s top destination for FDI, is to become a new engine for global construction growth in emerging markets, growing at nearly double the rate of China, the report said. India is also set to replace Japan as the third largest construction market in the world by 2021. The report pointed to weaknesses in key emerging market players, such as Russia and Brazil due to economic turbulence and excessive bureaucracy, and highlighted fast-growing contenders Mexico and Indonesia. In Latin America, Mexico is to overtake Brazil, and in Asia, Indonesia is to overtake Japan by 2030 in terms of growth, the report predicted.
Global construction as a whole is predicted to grow by 3.9% per year, making it faster than global GDP growth. Momentum will come from developed markets as they recover from economic recession, and emerging economies as they continue to urbanise and industrialise. “The current weakness in most emerging countries is likely to be temporary, with higher growth rates soon returning,” said Mike Betts at Global Construction Perspectives. While Europe will not fully recover to pre-crisis levels until at least 2025, the UK is expected to replace Germany as the sixth-largest construction market globally by 2030.
The population boom in emerging economies also means future increased demand for construction projects. According to the report: “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.” But temporary reductions in growth in emerging economies also mean significant risk for investors, not only in India but in other key markets such as Russia, Turkey and Brazil.
Construction is a critical industrial sector for economic growth as it provides countries with numerous jobs and increased wealth. It is both an indicator and a driver of healthy, growing economies and is seen, the report writes, as “fundamental to prosperous societies around the world”.