Conditions in the world’s building markets remain buoyant, a global survey of more than 2,500 firms in the construction sector indicates.

And there is growing confidence of a modest recovery in new home building across Europe.

The Royal Institute of Chartered Surveyors (RICS) has released the second quarter edition of its RICS Construction Monitor, which is based on results of a survey involving 2,548 firms from around the world.

According to the report, overall industry conditions remain buoyant.

On a worldwide bases, the Construction Activity Index remained unchanged in the second quarter at +15.

The index measures current market conditions and twelve-month expectations regarding residential building workloads, non-residential building workloads, civil/infrastructure workloads and profit margins.

A net positive reading indicates that a higher number of respondents are optimistic in their assessment about current and future market conditions than are pessimistic.

(Source: RICS Construction Monitor, Q2, 2024)

Leading the way is The Americas (+27) and the Middle East and Africa (+24), where the index remained in buoyant territory despite moderating during the quarter.

The big mover, however, has been Europe.

Across the European continent, the index increased by 6 points during the quarter to +12.

This represents the highest reading in Europe for more than two years.

Whilst sentiment is positive across all sectors, meanwhile, forward expectations are particularly strong for infrastructure (see chart).

In other survey results:

  • Overall, new business enquires have fallen flat, with a net balance falling from +5 in the March quarter to +2 in the June quarter. However, there is significant regional divergence in this metric, with readings of +24 in each of the Americas and MEA but dreadful readings of -18 in APAC. In Europe, new business readings turned positive +6 for the first time since early 2022.
  • Material costs and financial constraints are the most significant factors which are restricting construction activity.

(source: as above)

As mentioned above, the big mover in the survey is Europe.

Largely speaking, the improvement in Europe is being driven by rising sentiment in private residential construction.

Over recent years, housing construction activity in Europe has been curtailed on account of rising interest rates.

However,  there are tentative signs that momentum may be picking up as house prices have stabilised and have now returned to a modest upward trend in recent quarters.

Survey results are particularly strong in the Netherlands, Italy, Ireland, Germany and Spain.

The improving sentiment in Europe is further reinforced by the aforementioned increase in new business enquires across the continent.

The improvement is coming, however, amid ongoing challenges in the European economy.

In its Spring 2024 forecast, the European Union said its expected growth throughout the European Union of only 1.0 percent in 2024 and 1.6 percent in 2025.

As a result, RICS emphasises that the improvement in European readings is coming off a low base and may yet prove to be fragile.

(source: as above)

In terms of individual countries, Saudi Arabia continues to lead the way, as it has for much of the past two years.

This is followed by The Philippines, Mauritius, India and the UAE.

In Saudi Arabia, the nation is experiencing an unprecedented construction boom as its government has embarked on a mammoth program to transform the country’s economy away from oil dependence.

(source: as above)

On the flip side, conditions are extremely challenging in New Zealand, Qatar and China.

In New Zealand, the value of building work has fallen to two year lows.

In China, sentiment is being dragged down by a sustained property market collapse, which is occurring amid significant property developer debt and subdued investor and consumer confidence.

 

Enjoying Sourceable articles? Subscribe for Free and receive daily updates of all articles which are published on our site

 

Want to grow your sales, reach more new clients and expand your client base across Australia’s design and construction sector?

Advertise on Sourceable and have your business seen by the thousands of architects, engineers, builders/construction contractors, subcontractors/trade contractors, property developers and building industry suppliers who read our stories across the civil, commercial and residential construction sector