The deterioration in construction output growth across emerging markets has been worse than previously expected, particularly in the US and the Middle East. Therefore, the forecast for global construction output growth in 2019 has been revised down to 2.7%, which will be the slowest pace of growth in a decade, according to GlobalData, a leading data and analytics company.
GlobalData’s central forecast sees global construction output growth increase to 3.2% in 2020 and then stabilize at 3.4% over the remainder of the forecast period, which runs to 2023. According to the company’s latest report, ‘Global Construction Outlook to 2023 – Q3 2019 Update’, this is partly driven by a projected improvement in the global economy in 2020, which in turn relies on improvements in financial market sentiment and stabilization in some of the larger currently-troubled emerging markets.
Danny Richards, Lead Economist at GlobalData, comments: “Some major advanced economies have struggled to generate growth momentum, including the US, the UK and Australia. In China, where the authorities are stepping up investment in infrastructure to prevent a continued slowdown, growth will remain positive, contributing to a slight acceleration in growth in total output in the emerging markets.”
Richards continues: “Geopolitical risks are intensifying, which could potentially undermine investor confidence and disrupt capital flows in the early part of the forecast period. Risks to the overall forecast stem primarily from a possible escalation in the trade war between the US and China, as well as inflamed tensions between the US and Iran following the recent drone strikes on Saudi Arabia’s largest oil processing center, which were blamed on Iran.
“The emerging markets of South-East Asia will invest heavily in new infrastructure projects, supported by private investment, and this region will be the fastest growing, expanding by 6.4% between 2019 and 2023.”
Information based on GlobalData’s report: ‘Global Construction Outlook to 2023 – Q3 2019 Update.
Related Stories
Market Data | Feb 10, 2016
Nonresidential building starts and spending should see solid gains in 2016: Gilbane report
But finding skilled workers continues to be a problem and could inflate a project's costs.
Market Data | Feb 9, 2016
Cushman & Wakefield is bullish on U.S. economy and its property markets
Sees positive signs for construction and investment growth in warehouses, offices, and retail
Market Data | Feb 5, 2016
CMD/Oxford forecast: Nonresidential building growth will recover modestly in 2016
Increased government spending on infrastructure projects should help.
Market Data | Feb 4, 2016
Mortenson: Nonresidential construction costs expected to increase in six major metros
The Construction Cost Index, from Mortenson Construction, indicated rises between 3 and 4% on average.
Contractors | Feb 1, 2016
ABC: Tepid GDP growth a sign construction spending may sputter
Though the economy did not have a strong ending to 2015, the data does not suggest that nonresidential construction spending is set to decline.
Data Centers | Jan 28, 2016
Top 10 markets for data center construction
JLL’s latest outlook foresees a maturation in certain metros.
Market Data | Jan 20, 2016
Nonresidential building starts sag in 2015
CDM Research finds only a few positive signs among the leading sectors.
Market Data | Jan 20, 2016
Architecture Billings Index ends year on positive note
While volatility persists, architecture firms reported healthy performance for 2015.
Market Data | Jan 15, 2016
ABC: Construction material prices continue free fall in December
In December, construction material prices fell for the sixth consecutive month. Prices have declined 7.2% since peaking in August 2014.
Market Data | Jan 13, 2016
Morgan Stanley bucks gloom and doom, thinks U.S. economy has legs through 2020
Strong job growth and dwindling consumer debt give rise to hope.