“Steady global economic growth, increasing demand for construction and a shortage of skills and labour, combine to provide governments, clients and the industry compelling drivers to grasp the moment and commit to investing in productivity improvement.” – Steve McGuckin
Introduction: This year’s international construction market survey presents data analyzed from 43 markets around the world delivering greater insight into the global construction industry. Our team of economists worked closely with our local experts to analyze an expansive cost dataset to provide insight into how the construction industry is performing. This reveals key global trends as well as more detailed local market dynamics. Read the foreword.
Global construction industry: a new normal?
The start of 2016 was a concerning one for the global construction industry; the commodities market was faltering and commodity reliant economies across the globe were struggling to adjust. Fast forward to the second half of the year and the picture looked more stable.
The commodities market bottomed out and price increases returned, giving renewed confidence to many regions of the world. Major economies such as Brazil, Russia, Europe, the USA and China delivered a higher GDP than many predicted.
This improved growth is a welcome and positive sign, but increases in GDP remain below the global annual growth rates seen prior to the financial crisis in 2009 when global economic growth peaked at 4.3 percent, compared to 3.1 percent in 2016.
This has given to what many refer to as a new normal for the global economy – slow and steady growth. However recent forecasts suggest that growth is gaining momentum, with the IMF forecasting 3.5 percent global growth in 2017.
This year’s international construction market survey reflects this position with construction markets heating up as global conditions improve. Global construction cost inflation for 2016 was recorded at 3.7 percent, compared to 2.9 percent in 2015. The growing skills shortage is a significant driver and is becoming a more acute global problem for the industry.
“The growing skills shortage is becoming a more acute global problem for the industry.”
– Steve McGuckin
Survey overview – building momentum
Five new markets entered the analysis for the first time this year: Bogota, Buenos Aires, Dar es Salaam, Madrid and Tokyo. Our analysis identified a number of challenges facing the construction industry as we progress through 2017, including skills shortages, exchange rate pressures and an acute need to improve productivity.
43 key markets analyzed
5 new markets added for 2017
56 % of global markets suffering from a skills shortage
3.7 % construction cost inflation in 2016
The rest of the report covers the following;
- Construction market – where’s hot and where’s not
- Most expensive cities to build in
- Overstretched labour market