Led by China and India, emerging nations are set to drive strong growth in the global construction industry throughout the remainder of the decade, a new report shows.
The report suggests the US, which is expecting a ‘sharp cyclical recovery’, will also grow strongly.
In its latest Global Construction 2020 report, accounting and consulting firm PricewaterhouseCoopers (PwC) says it expects the overall value of global construction activity to grow by 67 per cent between now and 2020.
Emerging markets, led by China and India, along with strong contributions also from Russia and Indonesia, will lead the way as rapidly-growing urban populations and middle classes support new economic growth in emerging cities.
By the end of the decade, emerging markets will account for 55 per cent of all global activity, up from 46 per cent today.
In the developed world, meanwhile, PwC expects the US, Canada and Australia to be the strongest performing markets.
In the US, PwC says, a combination of cyclical factors and population growth will power a strong upturn in residential and non-residential construction and help the country stand out from most developed nations by registering a sharp cyclical rebound.
In Canada and Australia, population growth and demand for natural resources will drive strong activity levels.
Outside of these countries, however, construction activity throughout the developed world will be constrained by fiscal deficits and weak economies.
In total, PwC says, China, India, the US, Indonesia, Canada, Russia and Australia will account for 65 per cent of all worldwide construction growth throughout the remainder of the decade.
- The report suggests that, though China’s rate of construction growth will slow from the breakneck speeds seen over the last few years, the Middle Kingdom – which overtook the US as the world’s biggest construction market in 2010 – will remain the world’s largest construction market throughout the decade.
- Elsewhere in Asia, emerging markets will grow fast as levels of income per capita, growing populations, larger savings and strengthening cross-border trade links drive higher growth in construction.
According to the report, PwC also predicts that:
- Driven by population growth, healthy corporate balance sheets and stronger earnings, the US will experience double digit growth in both residential and non-residential markets in the short term.
- Emerging markets outside of Asia will grow less strongly, but all emerging regions will outpace developing nations and several non-Asian countries will enjoy high rates of growth.
- Russia’s construction growth will remain strong as it seeks to double energy output and upgrade road, rail and airport infrastructure in preparation for the 2014 Winter Olympics and the 2018 FIFA World Cup.
- Construction growth in Western Europe will be minimal as the continent grapples with high public deficits, static or declining populations and lower economic growth.