Construction growth to “power global economy”

By Andy Brown04 October 2021

Global construction growth by sub-sector

Global construction output is expected to grow by 6.6% in 2021 and 42% by 2030, driven by government stimuli and the demand for residential construction, according to a new report by Marsh and Guy Carpenter, both businesses of Marsh McLennan.

The report, Future of Construction: A Global Forecast for Construction to 2030, written with Oxford Economics, looks at construction as the industry recovers from the effects of Covid-19 and the key drivers shaping its future over the next decade.

Predicted average annual growth in construction is 3.6% per annum – faster than either the services or manufacturing sectors. Global infrastructure construction is forecast to grow by an annual average of 5.1%.

Graham Robinson, global infrastructure and construction lead at Oxford Economics, said, “It’s not surprising that construction is expected to power the global economy over this next decade, considering the unprecedented nature of the stimulus spending on infrastructure by governments and the unleashing of excess household savings in the wake of Covid.”

Top ten global construction markets by 2030

As the sector grows, however, so too does the risk of greater pollution and waste, the report warns. Construction and the wider built environment currently accounts for around 40% of the world’s global greenhouse gas emissions.

Climate change and the race to net zero are arguably the greatest challenges that face the industry, according to the report.

The need to radically reduce the amount of carbon embedded in new construction will drive the growth of a deconstruction industry that reuses huge existing urban stockpiles of construction materials.

The reports says that in 2020, environmental, social, and governance related capital for infrastructure grew 28%, largely due to a flow of fundraising into sustainability-related strategies.

As significant equity is usually allocated to infrastructure by major construction companies and developers using their own corporate balance sheets, opportunities exist for those companies that develop new technologies, designs, and processes.

Richard Gurney, global head of construction, Marsh Specialty, said, “Climate change and the ESG [Environmental, social and corporate governance] agenda – and the risks and opportunities they present – are among the biggest challenges the global construction industry faces over the next decade.”

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, World Construction Week Newsletter features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Longer Reads
Is electric equipment the answer?
Construction equipment is rapidly evolving to become greener and cleaner
Why ESG-linked loans are impacting construction finances
A way to help fight the climate crisis or a pile of greenwash? How ESG-linked loans are entering the corporate mainstream 
Meeting productivity demands: new compaction equipment
How new roadbuilding and compaction equipment is meeting productivity demands, while keeping emissions low
CONNECT WITH THE TEAM
Andy Brown Editor, International Construction Tel: +44 (0) 1892 786 224 E-mail: andy.brown@khl.com
Simon Kelly Sales Manager Tel: +44 (0) 1892 786 223 E-mail: simon.kelly@khl.com
CONNECT WITH SOCIAL MEDIA