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
Industry Research | May 22, 2023
2023 High Growth Study shares tips for finding success in uncertain times
Lee Frederiksen, Managing Partner, Hinge, reveals key takeaways from the firm's recent High Growth study.
Multifamily Housing | May 8, 2023
The average multifamily rent was $1,709 in April 2023, up for the second straight month
Despite economic headwinds, the multifamily housing market continues to demonstrate resilience, according to a new Yardi Matrix report.
Market Data | May 2, 2023
Nonresidential construction spending up 0.7% in March 2023 versus previous month
National nonresidential construction spending increased by 0.7% in March, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $997.1 billion for the month.
Hotel Facilities | May 2, 2023
U.S. hotel construction up 9% in the first quarter of 2023, led by Marriott and Hilton
In the latest United States Construction Pipeline Trend Report from Lodging Econometrics (LE), analysts report that construction pipeline projects in the U.S. continue to increase, standing at 5,545 projects/658,207 rooms at the close of Q1 2023. Up 9% by both projects and rooms year-over-year (YOY); project totals at Q1 ‘23 are just 338 projects, or 5.7%, behind the all-time high of 5,883 projects recorded in Q2 2008.
Market Data | May 1, 2023
AEC firm proposal activity rebounds in the first quarter of 2023: PSMJ report
Proposal activity for architecture, engineering and construction (A/E/C) firms increased significantly in the 1st Quarter of 2023, according to PSMJ’s Quarterly Market Forecast (QMF) survey. The predictive measure of the industry’s health rebounded to a net plus/minus index (NPMI) of 32.8 in the first three months of the year.
Industry Research | Apr 25, 2023
The commercial real estate sector shouldn’t panic (yet) about recent bank failures
A new Cushman & Wakefield report depicts a “well capitalized” banking industry that is responding assertively to isolated weaknesses, but is also tightening its lending.
Architects | Apr 21, 2023
Architecture billings improve slightly in March
Architecture firms reported a modest increase in March billings. This positive news was tempered by a slight decrease in new design contracts according to a new report released today from The American Institute of Architects (AIA). March was the first time since last September in which billings improved.
Contractors | Apr 19, 2023
Rising labor, material prices cost subcontractors $97 billion in unplanned expenses
Subcontractors continue to bear the brunt of rising input costs for materials and labor, according to a survey of nearly 900 commercial construction professionals.
Data Centers | Apr 14, 2023
JLL's data center outlook: Cloud computing, AI driving exponential growth for data center industry
According to JLL’s new Global Data Center Outlook, the mass adoption of cloud computing and artificial intelligence (AI) is driving exponential growth for the data center industry, with hyperscale and edge computing leading investor demand.
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
