Emerging market construction to double by 2020
By Chris Sleight16 November 2009
The value of construction in emerging countries will more than double in the next 11 years according to Global Construction 2020, a new report from Global Construction Perspectives and Oxford Economics. Global construction output is expected to increase +70% overall, with mature countries' output rising +35%, compared to the +110% rise forecast in the developing world.
According to the report, the world construction market will be worth US$ 12.7 trillion in 2020, compared to US$ 7.5 trillion today. The steeper growth of emerging countries mean they will dominate by this time, with an output of US$ 7 trillion - 55% of the total. In contrast, today's mature markets will rise from their US$ 4.2 trillion value today to US$ 5.7 trillion in 2020.
The key driver to this emerging market growth is expected to be infrastructure construction, which the report says will grow +128% over the next decade. At the same time, non-residential construction in emerging markets is expected to double.
One result of this is that China is expected to overtake the US as the world's largest construction market in 2018. By 2020 the Chinese construction market is expected to be worth US£ 2.5 trillion - a staggering 19.1% of the global total.
But despite more lacklustre growth in developed world construction markets, there are expected to be some bright spots. Most notable is North America, with the US market forecast for a strong housing-led rebound from 2011 to 2013.
Europe is expected to show weak growth, with the UK and Greece leading the way, and countries like Spain, Italy and France trailing behind.
However, Eastern Europe is expected to offer the best growth prospects, with a +100% rise in construction output forecast over the next decade. Poland is seen as one of the ten fastest growing construction markets in the world between now and 2020, and further east Russia also shows great potential, with similarly high growth taking the market to US$ 335 billion by the same time.
Besides China and Russia, Global Construction Perspectives sees India, Nigeria and Vietnam as the fastest growing construction markets over the next 11 years.
Japan meanwhile is expected to show the weakest growth of all major markets over the next decade. In 2003 it was overtaken by China as the world's second largest construction market. The middle of the next decade is expected to see it lose its position as the world's third largest construction market as India rises in importance.
For more information, to purchase the report or find out about the Global Construciton Perspectives database of forecasts, visit www.globalconstruction2020.com