Massive increase in construction predicted in next decade with China leading the way, new report say
The global construction industry will not return to growth until 2011 with emerging markets experiencing a 110% increases in output, according to a newly published ten year forecast.
Emerging markets will rapidly overtake the construction output of their highly developed neighbours with China becoming the world’s largest market by 2018, says the report from Global Construction Perspectives and Oxford Economics.
India is also set to race ahead as the US and Western Europe lag behind. Nigeria, Vietnam and Turkey will also experience strong growth.
Of the developed nations Japan will see the slowest growth in the next decade, the report also shows.
Today the global construction market is worth an estimated $7.5 trillion, representing 13.4% of global GDP.
But by 2020, construction will be a $12.7 trillion global market, an overall growth of 70% in the next decade.
It is predicted that China will have 19.1% share of the industry worth $2.4 trillion by 2020.
This will mean an increases in residential property being built as it is the largest construction market globally.
It is expected to account for 40% of the total global construction market by 2020 when it will be worth $5.1 trillion.
The report shows that the downturn in the global construction industry from 2007 to 2009 has been of epic proportions.
In developed countries this has caused a slump in annual construction output of over $650 billion, more than the entire output of the construction industries of both Germany and the UK combined, or over four times the size of construction output in Russia.
The brunt of this downturn has been taken by North America and Western Europe.
But the US will see the strongest growth amongst developed countries particularly during 2011 to 2013.
Despite the sub-prime crisis, house building will help to fuel the recovery.
The infrastructure construction market in emerging markets will grow by a staggering 128% over the next decade to 2020, compared with just 18% over the same period in developed countries.
As the global economy recovers the top ten highest growth markets by 2020 will be entirely composed of emerging markets with Poland the only European country to feature on the list.
Speaking at the launch of the report Global Construction 2020 in London, Mike Betts of Global Construction Perspectives said there will be a dramatic shift in the importance of emerging markets.
‘The Dragons and Elephants of China and India have only felt a ripple of the economic crisis in their construction industries and we predict astonishing growth rates for them over the next ten years,’ he said.
Adrian Cooper of leading business forecasters Oxford Economics said that all of the data points to both short and long term growth in emerging markets.
‘We predict that in just ten years time construction in these markets will more than double in size, growing by an estimated 110% and representing 17.2% of GDP in 2020,’ he explained.