With 2013 soon to come to an end and the Christmas holidays fast approaching, we thought it would be a good idea to take a look at what experts are telling us are the new trends and what to expect in the short and medium term future for the world of construction.
As the story goes, “There is good news and bad news, which one do you want first?” We will cut to the chase and go back a little to 2012 since we have actual numbers we can build on. According to Reportlinker.com¹, the global construction market was valued over US$99 billion in 2012, the Asia-Pacific region accounted for 42.5% of it and China, as one could expect, had the lion share of that market with 66.1% in 2012.
In second and third position were Europe and North America, accounting for 26.9% and 20.8%. Growth projections for these regions are expected to reach 22.7% and 20% respectively in 2017 and 47.6% for the Asia-Pacific region with a noted slowdown in China and India. With the exception of Germany and Scandinavia which are leading the pack in terms of construction and growth, no impressive recovery is to be expected in 2014 for Europe and the market should remain -20% below peak.
They offer growth prospects in the areas of energy and infrastructure. Being the host of the summer Olympics and the World Cup, Brazil leads all of Latin America in construction. It will aggressively continue to expand its infrastructure and invest in urban development, commodities and renewable energies etc. Chile, Panama and Peru are also good growth contenders but represent smaller long-term markets.
Demand in the Middle East and Africa remains unstable and unpredictable and commodity-price driven. The impact of the Arab Spring was felt in the business and political climate. No single country is taking the lead but some cities are experiencing a growth explosion (See list below).
Other numbers are being circulated, according to Global Construction Perspectives and Oxford Economics, the global construction industry is expected to grow to $9.4 trillion in 2015. Since developing countries have well established infrastructures, reparation and upgrade will constitute most of the construction work. To alleviate traffic congestions in large cities, governments will have to upgrade or create new mass transit systems that will also fuel the projected growth. So where else and in what areas will this growth take place?
Based on population growth rate and GDP below are some of the fastest growing cities:
- Brasilia (Brazil)
- Riyadh (Saudi Arabia)
- Jeddah (Saudi Arabia)
- Hyderabad (India)
- Bandung & Jakarat (Indonesia)
- Pune (India)
- Wuhan (China)
- Delhi & Bangalore (India)
Closer to home, The US Department of Commerce reported that sales of single family houses in August 2013 were up 12.6 percent from August 2012. We are noticing that “Every major segment of nonresidential construction exhibited job growth for a second consecutive month, a positive indication after the sector posted consecutive losses for the five previous months” declares Anirban Basu, chief economist at Associated Builders and Contractors. The 2014 Dodge Construction Outlook² predicts that construction starts are expected to increase by 9% and reach $555 billion in 2014.
So, while we are far from out of the tunnel, signs of recovery are on the horizon and the construction industry will continue to expand and address the needs of an ever growing population.
So if you are doing residential construction in the US or abroad, and want to find out about great deals on new or used concrete pumps and other construction equipment, call United Equipment Sales at (503)283-210, visit us online and check out our new facility
We have been in the market for over 42 years and can help you find just what you need for your next job.
¹ Complete market study can be found at: Global Construction Aggregates Market – Key Trends and Opportunities to 2017
² Dodge Construction Outlook complete report