A new report by Global Construction Perspectives and Oxford Economics forecasts the volume of global construction output will grow by more than 70 per cent to US$15 trillion worldwide by 2025. The global study – the third in a series – shows the meteoric growth, which outpaces that of global GDP, will be concentrated in three countries – China, the U.S. and India.
“World construction markets are at a tipping point already with 52 per cent of all construction activity in emerging markets today. We expect to see this increasing to 63 per cent by 2025, with China and India contributing most to growth in emerging markets,” says Graham Robinson, executive director, Global Construction Perspectives.
China overtook the U.S. to become the world’s largest construction market in 2010, and is expected to increase its global share from 18 per cent today to 26 per cent in 2025, despite an expected slowdown. “China and India will need to build another 270 million new homes by 2025 – mostly affordable homes”, says Mike Betts from Global Construction Perspectives.
Significant opportunities have arisen for a new generation of ‘Asian Tigers’. Indonesia, Vietnam and the Philippines are becoming increasingly attractive for export-oriented manufacturing and represent a $350 billion construction market growing at more than 6 per cent annually.
“While China is the key market, it would be a mistake to ignore the transformations happening elsewhere in Asia, which will help boost construction in Asia Pacific” says Jeremy Leonard, Director of Industry Services at Oxford Economics.
India will overtake Japan as the third-largest construction market with annual growth averaging 7.4 per cent annually in construction expected to exceed that of China.
The construction market in Western Europe is expected to be almost 5 per cent smaller in 2025 than its pre-recession peak in 2007, whilst North America is forecast to be almost 40 per cent larger.
“By 2050, there’ll be two billion additional city dwellers – sustainable urbanization will be a major construction challenge and the industry must strive to find innovative new products and solutions, to contribute to building better cities”, says Bruno Lafont, Chairman and Chief Executive of global building products Lafarge.