Construction Market Led by US, China and India to Reach 8 Trillion by 2030
There has been a new report by the Global Construction Perspectives and Oxford Economics in London, England, that has shed some light on the future of the global construction market and the major players involved.
This report, titled “Global Construction 2030”, serves as a tool for senior executives who are looking for insight into the major construction markets by 2030 and is also the fourth installment of a series brought forth by the institutions.
This year’s report has forecasted the construction market to grow by 85% globally to 15.5 trillion worldwide by 2030, and has identified the United States, China, and India as the three major influences for this rise. It is expected that these three nations will make up 57% of the new construction market leading up to 2030.
Between the United States and China, China is actually expected to contribute less due to the first decline in housing output this year. “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, U.S. construction will grow faster than China over the next 15 years — growing by an average of 5 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,” mentioned Graham Robinson, who is the executive director of Global Construction Perspectives.
The recent abolition of the one child policy in China, however, as well as China’s shift to a consumer economy will surely call for a review of the available information. Currently, India’s Delhi population is expected to reach 10.4 million people by 2030, and 165 million for the whole country, which will propel its construction market forward twice as much as China in that time.
With regards to Europe, the United Kingdom is expected to push past Germany and become the sixth largest construction market by the target year with Europe’s crisis expecting to last until 2025. By providing a reliable forecast for industry professionals, these organizations help accurately predict the growth of construction markets around the world. This helps companies prepare themselves by analyzing the trends and the growths of other construction companies in different areas of the world and see where and with who it is best to conduct business with.
There are also a number of developing countries that are in the works as suggested by Jeremy Leonard, who is Director of Industry Services at Oxford Economics, “Whilst there is an interesting relationship between the top three countries, it is important to not 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 also overtake Japan by 2030.”
Brazil’s weakness is attributed to the ongoing Petrobras scandal as well as government standstills due to bureaucracy, and is unfortunately facing a decade similar to the one the European Union has been battling with. It comes as little surprise that Mexico will push past Brazil as it has emerged as a major manufacturing and industrial hub over the past decade.
For example, many Canadian projects outsource their manufacturing to Mexico such as Bombardier and the Toronto Transit Commission in order to stay competitive in today’s evolving market. Unfortunately for the U.S. market, it is still recovering from the effects of the Great Recession that affected the maintenance and construction sectors directly, which is another reason why China and India have managed to creep to the top.
Nevertheless the recuperation from this phase signifies new employment opportunities and job growth but it is expected that the U.S. will face at least one other period of economic contraction in the next fifteen years as well as the interest rates rising, thus making borrowing money more expensive. According to the Associated Builders and Contractors industry analysis group, unemployment rates declined in the past year for 48 of the country’s states, signalling a recuperation towards the once-all-mighty American construction business. All in all, it is interesting to see how the U.S. and Canadian markets cope with some of these emerging nations.