Conditions in international construction markets have shifted further into expansionary territory as a modest recovery is underway in Europe and momentum is increasing across the America’s, the latest report has found.

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

Based on a survey involving 2,770 company responses, the report provides a leading guide to conditions and trends in construction and infrastructure markets around the world.

Overall, the report indicates that construction markets are seeing further momentum.

At a global level, the composite Construction Activity Index increased from +10 in the December quarter to +15 in the March quarter.

The index measures current conditions and 12-month expectations in terms of residential workloads, commercial/non-residential building workloads, infrastructure workloads and profit margins.

(Source: Global Construction Monitor Report, Royal Institute of Chartered Surveyors, March 2024)

Largely speaking, the increase was driven by a recovery in Europe along with further momentum across the Americas.

In Europe, the CAI recovered from -6 in the December quarter to +6 in the March quarter.

This occurred on account of a recovery in both residential and commercial building as well as a substantial uptick in infrastructure work.

Over recent years, Europe’s construction markets have been extremely subdued on account of higher borrowing costs, subdued economic conditions and pressures on costs.

The effect has been particularly evident in residential building, which is highly sensitive to interest rate rises.

Going forward, however, there are signs that green shoots may be appearing notwithstanding that activity levels are expected to remain subdued throughout 2024.

In particular, a recent uptick in house prices may signal greater demand for new housing and may help to enable developers to make feasibility considerations work notwithstanding recent increases in construction costs.

Meanwhile, civil engineering is benefiting as Next Generation ER funds are driving the launch of infrastructure projects which have been delayed by resource constraints.

Conditions are particularly buoyant in Spain, Ireland and Italy.

In the Americas meanwhile, momentum is increasing as improving workloads in residential and commercial building in the US and Canada are now supporting ever resilient infrastructure workloads and are driving a positive trend across the wider construction industry.

Improving sentiment in these areas is also reflected in firmer numbers for new business enquiries.

At the other end of the scale, activity remains extremely subdued in China amid the ongoing fallout from the real-estate collapse in that country.

(source: as above)

As activity improves, the outlook for employment remains positive.

Overall, a net balance of +19 percent of survey respondents expects an uplift in headcounts over the next twelve months.

Employment expectations are particularly strong in the Philippines, Saudi Arabia, Nigeria, Oman, India, the UAE, Mauritius and the US.

Finally, the survey asked about barriers which are inhibiting further construction growth.

The most commonly cited issue involved financial constraints (citied by 68 percent of respondents) followed by material costs (65 percent) and skills shortages (more than 50 percent).


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