Momentum in the world’s construction markets has moderated amid ongoing weakness in the Chinese real-estate sector, a new report shows.

But conditions and activity remain at healthy levels overall.

The Royal Institution of Chartered Surveyors has released the December quarter edition of its Global Construction Monitor report.

Published every quarter, the report provides an update in relation to key trends in construction and infrastructure markets.

It is based on survey responses from 2,358 firms globally.

The report indicates that momentum in the world’s construction markets eased across the December quarter.

All up, the Construction Sentiment Index dropped by five points to go from +12 in the September quarter to a still healthy levels of +7 in the December quarter.

The index is constructed by taking an unweighted average of current and 12-month expectations of four series: residential workloads, nonresidential workloads, infrastructure workloads and profit margins.

Any reading above zero indicates positive sentiment and conditions.

Dragging the index lower was the Asia Pacific region (see chart), where ongoing weakness in Chines and Hong Kong real estate more than offset momentum in countries such as India and Sri Lanka.

Elsewhere, sentiment is holding up in other regions (see chart).

In terms of sectors, infrastructure remains the strongest performer although housing markets across most regions are strengthening (see chart).

The survey also found that:

• By individual countries, Spain remains the strongest performer followed by the UAE, India, Germany and Saudi Arabia. Since the pandemic, Spain has experienced high levels of construction growth on account of a large influx of EU recovery funds, increased public infrastructure spending and strong housing demand. In the UAE, the market is being driven by rapid urban expansion and population growth as well as investments in tourism facilities, data centres and sustainability initiatives.
• In terms of employment, current conditions and forward expectations vary according to country (see chart). Unsurprisingly, employment is strongest in markets which are most active.
• Financial constraints remain the most significant barrier to increasing construction activity. This is followed by material costs and competition.

Resilient economy, improving construction conditions

The report comes as the world’s economy remains resilient to trade disruptions and forecasters expect improving conditions in global construction markets.

In its latest update released last month, the International Monetary Fund forecast (IMF) that global growth in real gross domestic product (real GDP) will remain stable at 3.3 percent in 2026 (unchanged from 2025) and 3.2 percent in 2027.

According to the IMF, the world’s economy has been resilient to US led tariff disruptions.

It said that this is attributable to easing trade tensions, higher-than-expected fiscal stimulus, easing financial conditions and the agility of the private sector to mitigate trade disruptions.

Meanwhile, forecasters are optimistic about the outlook for construction.

In its latest report, Oxford Economics says that it expects global construction activity to increase by 2.9 percent in 2026.

This follows a contraction in activity which occurred during 2025 as the Chinese real estate downturn continued and US tariffs weighed on activity in both the US and China.

In its report, Oxford said that China is approaching the bottom of its real-estate downturn and is in likely to experience a rebound in commencements in 2026.

In the US, it expects growth in home building activity to return in 2026.

Oxford also expects that:

• Asia’s ‘construction tigers’ will lead global growth. This will occur as strong demographic trends, robust foreign investment and supportive governments will ensure South-East Asia remains home to some of the world’s fastest growing construction markets.
• Infrastructure investment will shift to utilities. Whilst civil engineering will remain an important driver of global growth, the focus of activity in this area is shifting from transport to utilities.

However, Oxford warns that labour shortages remain a structural challenge.

A structural worker shortage and weak productivity growth are limiting the industry’s ability to meet infrastructure, climate, and housing targets, it says.

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