World construction output to fall –3.7% this year
By Chris Sleight03 April 2009
Global construction output will fall -3.7% this year according to IHS Global Insight. The forecasting company's latest Global Construction Outlook said this is the steepest drop for at least 20 years.
This year's fall comes on the back of a -1.8% fall in construction in 2008. The market will shrink to US$ 5.6 trillion this year, with every region except Asia seeing a fall in construction spending. Although the Japanese and Korean markets are set to contract, growth in China and India in particular will lift the region's construction output by +2.6% this year.
IHS Global Insight says the world construction market will return to growth in 2010, with a stronger rebound expected in 2011. This should see global construction output return to the peak level of US$ 5.8 trillion, seen in 2007.
Scott Hazelton, director of construction services at IHS Global Insight said, "While 2010 will be weak, Asian dynamism and North American resilience will return to lead global construction growth near or above +5% in 2011 and 2012."
With residential construction spending set to fall -10% and non-residential construction seen declining -5% this year, the infrastructure looks attractive. The numerous stimulus packages around the world will help see global spending in this sector rise +5% in 2009.
In terms of individual countries, China is the clear star for the construction sector. IHS Global Insight says this US$ 701 billion market - the second largest in the world - will grow some +9.9% this year, by far the highest growth rate for any country in the world.
Elsewhere in Asia, the US$ 215 billion Indian market is expected to see +4.4% growth this year, and Indonesia - a medium sized market at US$ 82 billion - will grow +4.7%. Australia is also high up the growth table, with construction output expected to rise +4.8% to US$ 136 billion this year.