4 Trends Driving the Future Growth of Global Construction

In the post pandemic era, one can say that the global construction industry is standing on the threshold of a new era. The industry is poised to undergo significant transformations driven by emerging technologies, sustainability initiatives and evolving societal needs. 

According to data from Marsh, the global construction industry is set to grow by USD 4.5 trillion over the next decade to reach USD 15.2 trillion by 2030. It further predicts that China, India, the US and Indonesia alone will account for 60% of the growth, while the top 10 global construction markets are set to account for 70% of the growth over the same period. 

These countries, specifically, are expected to drive growth because they possess a combination of factors that drive construction demand, including robust population growth, rapid urbanisation, expanding economies, and government-led infrastructure initiatives.  

For example, India’s burgeoning population and infrastructure development plans create a strong construction market. Data reveals that between 2023 and 2027, the Indian construction market is set to grow at a CAGR of 9.9%, and the construction output is set to reach INR 66,954.8 billion by 2027.  

Similarly, in Indonesia, in 2020, the country’s construction sector expanded by 3.6%, with infrastructure projects accounting for a significant portion. The government plans to invest $422 billion in infrastructure development from 2020 to 2024, further fuelling construction demand and supporting economic growth. 

With that said, let’s look at each of these trends which are driving growth of the global sector in more detail. 

China’s Role in Global Construction Recovery  

Despite its declining population and slow pace of urbanisation, the opening up of the China market is set to be a significant market driver for the future growth of the global construction industry. It is predicted that the market will record steep growth in the next couple of years, by 2025.  

On one hand, China’s construction sector is set to witness a surge in demand for infrastructure development, urbanisation projects, and residential and commercial properties.  

On the other hand, despite widespread scepticism, its Belt and Road initiative, an ambitious project to link East Asia and Europe through physical infrastructure, is set to extend extensive opportunities for international collaboration and participation in large-scale infrastructure projects across Asia, Europe and Africa. 

Surplus Funds in Developed Economies  

Secondly, in the wake of the pandemic, we are seeing that the combination of limited spending opportunities, government stimulus measures, and precautionary saving behaviours has resulted in a substantial increase in savings among individuals and households in developed countries. This surplus of funds is expected to drive growth in the demand for residential construction projects.  

With higher levels of disposable income and a desire for improved living spaces, individuals are likely to invest their savings in housing-related activities such as renovations, expansions, and new home purchases.  

This surge in demand for residential construction projects presents an opportunity for the construction industry to experience a period of growth and economic recovery. 

Accelerated Growth Supported by Large Stimulus Programs  

Thirdly, accelerated infrastructure investment has been playing a crucial role in driving construction demand, supported by large stimulus programs aimed at revitalising post-pandemic economies.  

For example, Governments around the world have recognised the significance of infrastructure development in stimulating economic growth, creating jobs, and improving overall societal well-being. As a result, they have allocated substantial funds to infrastructure projects such as transportation systems, energy networks, public facilities, and digital infrastructure.  

These stimulus programs provide the necessary financial impetus to undertake ambitious construction projects, leading to increased employment opportunities within the construction sector and generating a ripple effect throughout the economy.  

For example, the “Build Back Better” program was introduced by the UK government as part of the country’s economic recovery strategy post-pandemic. The program focuses on investing in infrastructure projects to stimulate growth and create jobs in the construction industry. The government has allocated significant funds for infrastructure development, including transportation networks, housing, and renewable energy projects.  

A Merit expert adds, “For instance, there is a strong emphasis on building new affordable housing units and investing in the retrofitting and renovation of existing structures to improve energy efficiency. The plan also includes funding for the construction of new schools, hospitals, and other public facilities.” 

Greater Turn Towards Technology & Sustainability 

Last but not least, there is an increasing focus on productivity and data-driven decision making within organisations in the construction space. there has been a notable shift towards prioritising productivity, efficiency, and enhanced collaboration among teams.  

This trend involves leveraging data and technology to streamline the construction process, making it more efficient, cost-effective, and sustainable. Construction firms are adopting innovative tools like Building Information Modeling (BIM), cloud-based project management systems, and Internet of Things (IoT) devices to optimise workflows, improve communication, and minimise errors.  

Data-driven insights enable better decision-making, resource allocation, and risk management. Furthermore, sustainable construction practices such as green building certifications, renewable energy integration, and materials recycling are gaining prominence, aligning with the industry’s growing focus on environmental responsibility. 

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