Key Construction Markets

In the US, strong residential growth, unhindered by lockdown restrictions, is driving momentum in the construction sector; non-residential growth is expected to continue to be sluggish.
The next iteration of the American Jobs Plan Act (AJP) will underscore US infrastructure construction with plans for major spending on infrastructure will flow into rebuilding highways, railroads, repairing old bridges and boring new tunnels.
Similar trends in Canada. Social and cultural changes will see demand for infrastructure such as data centres, warehouses, and telecom networks to support increasing digitisation of the economy.

Major government stimulus efforts, particularly focused on infrastructure, saw construction activity rebound in 2021.
Over the medium-term there will be less of an emphasis on infrastructure projects and more focus on developing non-residential real-estate investment with a focus on consumer led growth sectors such as retail, entertainment, health, and education buildings.
Residential construction will remain important; this is driven by renovation and maintenance work.

Two central drivers over the next decade will be the demand for new homes and huge infrastructure needs.
The need to develop new infrastructure is directly tied to the country’s growth trajectory resulting in demand for transportation infrastructure, power grids, and utility works.
Demand for new housing is powered by strong population growth and need for new housing for growing urban middle-class.

Major growth opportunities as the next generation EU fund is focused on supporting the post-pandemic rebound and raising the climate sustainability of the EU economy.
Particular focus be on supporting new rail infrastructure and recharging networks for electric vehicles as well as investment in shoring up old buildings to make them more energy efficient.
German residential sector growth is expected to continue for 2-3 years, but poor demographics will dent longer-term demand for new homebuilding. Road construction is expected to see significant investment and lead new infrastructure development.
Slow population growth in France will act as a drag on the residential sector but infrastructure construction will benefit from the upcoming 2024 Olympic Games in Paris.
In Scandinavia, modest population demographics and an oversupply of housing are expected to curtail new residential construction. Strong growth in distribution and logistics will drive the construction of new warehouses and distribution centres in Denmark.
Residential construction will be the major driver of new UK construction. Infrastructure construction held up well during the pandemic with the current government making investment in new infrastructure – as a result we expect robust growth in the sector.

Brazilian construction growth is forecast at close to 3% over the course of the 2020s. Non-residential construction will be supported by government schemes to attract foreign manufacturing companies to invest in the country.
In Mexico as strong population growth, increasing migration flows, and higher income trends will likely require a growing housing stock. Civil engineering construction will be less pronounced.
Chile’s construction sector is largely dominated by civil engineering in mining, importantly copper for which global demand continues to increase. In non-residential and residential construction there is also scope for rebound growth.

Western Africa, a lot of major construction historically centred around the oil industry, which there is a gradual diversification away from. Significant infrastructure modernisation efforts remain and will continue to result in investment, with spending on roads and energy the priority.
Eastern African is the most promising construction area of the continent. Foreign direct investment flows will be essential in underpinning much of the new finance for construction.

The region is looking to create new economic opportunities that allow diversification away from fossil-based economics. Building this new economy will require huge construction investment.
Many countries in the region are continuing to invest to support visions of a vibrant economies centred around commercial, business services and entertainment sectors.

Continued expansion of investment, coupled with solid consumer spending amid a rapidly expanding middle class and improving business environments will continue to underpin Indonesian construction activity.
In Malaysia, the construction sector is expected to remain subdued in the short-term despite the government’s revival of some mega infrastructure projects. Favourable demographics will aid longer-term residential sector growth.
The Philippines will also see civil engineering leading construction activity, thanks to a number of government programs supporting new infrastructure.

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21/10/2024

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