The Essentials of the Global Construction Futures Report 2023
Global Construction Futures is a major study of the global construction and engineering industry published by the renowned team of construction economists at Oxford Economics. It is developed with the purpose of understanding the global market and the forces shaping future demand. Aon is proud to support the publication of this prestigious and valuable report and to share some essentials in the executive summary.
Key findings:
- US$4.2 trillion growth in global construction work done over the next 15 years.
- US$13.9 trillion expected in 2037, driven by superpower construction markets China, the US and India.
- 70% of all construction work done over the next 15 years is by the world’s top 10 construction markets.
- The 4 fastest growing construction markets over the next 15 years will be Philippines, Vietnam, Malaysia and Indonesia.
- Growth globally is driven by huge opportunities in the global green economy.
- China growth resumes more steeply in 2025 after real estate challenges.
- Slump in US residential work done underway to blow US$150 billion hole in US construction market and slow growth outlook.
- India forecast to be the fastest growing construction superpower.
- UK set to be fastest growing for construction work done in Western Europe.
- Central bank mismanagement of interest rates could cause a cumulative fall of US$2 trillion globally for construction by 2027 relative to our baseline forecast – knocking off almost 1% from global growth.
Key market drivers identified
US Inflation Reduction Act
Growth in strategic inward investment, manufacturing and mega infrastructure projects, aimed at decarbonization and supported by the US Inflation Reduction Act, is helping drive growth from next year in the US construction market – the second largest in the world.
China opening-up
With the relaxation of China’s Zero-Covid policy, the construction market in China is expected to resume a steeper growth from 2025, after a year of declining real volumes and recovery in 2024. China faces longer-term structural challenges, such as a declining population and slower urbanization, which will also challenge growth for construction over the longer term.
Russia-Ukraine conflict
There is expected to be heightened growth in Eastern Europe over the next 15 years, as an estimated US$1 trillion reconstruction effort will need to start when the Russia-Ukraine conflict ends, and with rebuilding after the devastating earthquakes in Turkey.