Building the Future
Anybody supplying construction equipment and materials – or architecture, engineering or project management services – needs to brush up on their Mandarin. China will overtake the United States in 2018 as the world’s largest construction market, says a report issued last Friday. Market analysts Global Construction Perspectives and Oxford Economics jointly published Global Construction 2020, taking a look at what the world’s construction markets will look like a decade from now. I wish I could say I had read it myself, but at £295 for a .pdf, it is bit steep for my budget. Still, let’s try for a quick summary of some of the findings, which have profound implications for anyone in the construction industry or supplying that industry.
- Global construction will grow 69.3% to $12.7 trillion by 2020 (in 2008 dollars).
- Developed countries will trail developing markets in construction growth. Developed countries as a group will see no growth in 2010, but will accelerate to 4.4% in 2011, with the United States, United Kingdom, Canada and Australia out in front.
- Developing countries will be moving quickly in 2010, particularly China and India. Indeed, the report expects that construction growth in developing countries will be three times higher than in developed markets for the entire decade. The fastest growers will be India, Nigeria and China.
- China will surpass the United States as the world’s biggest construction market in 2018. The Chinese construction market will be worth about $2.4 trillion by 2020. China is already double the size of the Japanese construction market.
- India‘s growth rate in construction will be faster than China’s, but China’s GDP growth will exceed India’s. China’s total construction market will be about four times the size of India’s by 2020.
- The market for infrastructure construction in developing countries will be twice as large in 2020 as in developed countries. Growth rates for infrastructure construction will be lopsided, developing countries building out infrastructure at a 128% clip for the decade. Developed countries will languish at only 18% infrastructure growth in ten years. So much for the vaunted stimulus packages of the developed world.
- Residential construction will boom in developing markets, reaching 40% of global construction work by 2020. China’s residential construction market will be slower than many in the developing world, but will still more than double by 2020.
Any firm that plans to be a player in global construction needs to ramp up its language and cultural expertise – in a hurry.
