We expect global construction to grow by 67% from $7.2 trillion today to $12 trillion in 2020. Growth in China, India and the US will generate 54% of the $4.8 trillion increase in global construction output. A total of $97.7 trillion will be spent on construction globally during the next decade and by 2020 construction will account for 13.2% of world GDP.
China became world’s largest construction market in 2010 During the period of the easy monetary policy of the Chinese government over the past two years, the prices of raw material and labor increased, as did the country’s construction expenditure — reaching US$1 trillion in 2010. By contrast, the construction market in the United States declined during the economic slowdown: investment in construction totaled only US$983 billion last year, lower than the US$1.5 trillion recorded in 2005.
By 2020 emerging markets will account for 55% of global construction, up from 46% today. Construction will make up 16.5% of GDP in emerging markets by 2020, up from 14.7% in 2010.
This shift is led by China and India, with strong contributions to growth from Indonesia and Russia.
Construction in emerging markets will more than double in size over the next decade, growing by an estimated 110% to become a $7 trillion market, representing a massive 17.2% of GDP in 2020.
Conversely, developed countries will only grow by 35% from $4.2 trillion today to an estimated $5.7 trillion market.
Infrastructure will help drive emerging markets’ growth as countries upgrade their transport systems, utilities and buildings. Infrastructure construction in emerging markets will grow by a staggering 128% over the next decade, compared with just 18% growth in developed countries.
Construction in the US will rebound strongly from the downturn, led by short term double digit growth in both residential and non residential markets. An estimated $14.5 trillion will be spent on construction in the US from 2011-2020. US residential construction will be boosted by growth in its 320 million population, marking the US out from many other developed countries.
The Chinese construction market will be worth almost $2.5 trillion by 2020, representing a startling 19.1% of global construction output at 2008 prices and exchange rates.
We expect rapid growth in construction in Russia over the next decade, resulting in a market worth $335bn pa by 2020. Russia has the fifth-highest growth of all the countries in our forecast, only slightly behind Nigeria, India, China and Vietnam.