Massive-scale homebuilding in India and China will drive skyrocketing construction activity worldwide over the next decade, according to a new forecast.
Those two nations alone will need hundreds of millions of new homes by 2025, reports Global Construction 2025.
Combined with resurgent construction activity in the United States, the three countries together will account for almost 60 percent of global growth by 2025, says the report, the third in a series of major global construction and engineering studies published by Global Construction Perspectives and Oxford Economics.
Overall, the report predicts "meteoric" global construction growth that will reach $15 trillion in value by 2025.
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India's enormous and continuing need for affordable housing will drive major construction and engineering growth across that country, analysts say.
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India's enormous and continuing need for affordable housing will drive major construction and engineering growth across that country, analysts say.
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China's sizzling construction rate is actually expected to cool slightly over the period, making way for other emerging markets in Asia, the report said. Still, China should account for a whopping 26 percent of global construction in 2025.
The notable slow market: Western Europe, where the construction market is expected to contract to 2007 levels.
'Tipping Point'
“World construction markets are at a tipping point already, with 52 percent of all construction activity in emerging markets today," Graham Robinson, executive director of Global Construction Perspectives, said in an
announcement about the report.
"We expect to see this increasing to 63 percent by 2025, with China and India contributing most to growth in emerging markets."
China overtook the United States to become the world’s largest construction market in 2010 and is expected to increase its global share from 18 percent today to 26 percent in 2025, despite an expected slowdown, the study authors said.
New 'Asian Tigers'
“China and India will need to build another 270 million new homes by 2025—mostly affordable homes,” said Mike Betts, of Global Construction Perspectives.
Still, China's relative slowdown will create "significant opportunities" for other Asian markets, the study said.
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China's recent construction blitz is starting to slow, creating opportunities for other Asian markets, the report says. China is the world's largest construction market.
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Indonesia, Vietnam and the Philippines will make up a "new generation of 'Asian Tigers,'" becoming more attractive for export-oriented manufacturing and representing a $350 billion construction market growing at more than 6 percent 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 Jeremy Leonard, Director of Industry Services at Oxford Economics.
Eclipsing Japan
India will overtake Japan as the third-largest construction market, with annual growth averaging 7.4 percent in construction expected to exceed that of China, the report forecast.
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The report looks at infrastructure, commercial and residential construction. Activity in Western Europe is expected to contract in the coming years to 2007 levels.
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In Western Europe, on the other hand, the construction market in 2025 is expected to be almost 5 percent smaller than during its pre-recession peak in 2007, while North America is forecast to be almost 40 percent larger.
“By 2050, there’ll be two billion additional city dwellers," said Bruno Lafont, chairman and CEO of global building products Lafarge.
"Sustainable urbanization will be a major construction challenge, and the industry must strive to find innovative new products and solutions, to contribute to building better cities."
About the Report
Sponsored by two dozen construction and engineering multinationals, the report and databases provide forecasts for construction and engineering globally as well as for key regional and country markets.
The report and databases also examine trends and give forecasts for key sectors such as infrastructure, residential and non-residential markets.
