The world construction market will grow by more than 70 per cent between now and 2025 to hit $15 trillion as significant opportunities open up in emerging Asian economies and demand for 270 million new homes as well as commercial premises and infrastructure drives demand in China and India, a new report has found.
Released by Global Construction Perspectives and Oxford Economics, the Global Construction 2025 report says China, India and the US will account for around 60 per cent of growth and that just over half of the growth is expected to occur in emerging markets.
"World construction markets are at a tipping point already with 52 per cent of all construction activity in emerging markets today,” says Global Construction Perspectives executive director Graham Robinson. “We expect to see this increasing to 63 per cent by 2025, with China and India contributing most to growth in emerging markets."
The report says that China, which in 2010 overtook the US to become the world’s largest construction market, will increase its global market share from around 18 per cent today to around 26 per cent over the forecast period.
With an average annual growth rate (7.4 per cent) exceeding China’s, meanwhile, India will overtake Japan as the third-largest market.
Between them, the report says, the two countries will need 270 million new homes over the next 12 years.
In addition, significant opportunities have arisen for a new generation of ‘Asian Tigers’ such as Indonesia, Vietnam and the Philippines, which are becoming increasingly attractive for export-orientated manufacturing and between them constitute a $350 billion market growing at six 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 Oxford Economics director of industry services Jeremy Leonard.
Meanwhile, in the developed world, modest growth of 40 per cent over the forecast period is anticipated for North America, while the struggling European market is expected to contract by five per cent.
In terms of industry challenges, building better and more sustainable cities will be an important area as the trend toward urbanisation continues, according to Bruno Lafont, chairman and chief executive of global building products Lafarge.
"By 2050, there'll be two billion additional city dwellers - sustainable urbanisation will be a major construction challenge and the industry must strive to find innovative new products and solutions, to contribute to building better cities," he says.