Growth in the global construction industry is set to accelerate in 2019, according to GlobalData, but not all markets will enjoy an upswing.
Global construction industry 2019
In a recent white paper, GlobalData identified 10 key markets to watch in 2019. The list includes the largest markets in the World – China and the US – as well as some key emerging markets that could see their construction industries return to positive growth, these include Brazil, Mexico, Saudi Arabia and Nigeria.
The list also includes two markets that have been posting particularly fast growth in recent years, but for which downside risks abound – Poland and Kenya.
There are also markets for which 2019 could prove to be a pivotal year. In Southeast Asia, Thailand has just held elections to return the country to democratic rule; and in the UK, the industry’s growth prospects could be undermined if the House of Commons and the Executive fail to deliver a positive outcome for the country’s exit from the EU.
Markets to watch
Demand for new infrastructure together with ongoing investments especially in the transport, telecommunications and energy and utility sectors are expected to support growth.
Uncertainty over Brexit continues to unnerve investors, but the pipeline of infrastructure projects will support the construction industry’s expansion.
Construction has been booming, as EU-funded projects have resulted in a sharp recovery from the 2016 downturn. However, the surge in construction activity has put intense upward pressure on construction costs, which could disrupt project implementation in 2019.
China’s construction industry strengthened in the latter stages of 2018 and will be propped up by investment in infrastructure, but the industry’s expansion remains on a general slowing trend.
Thailand’s construction industry recovered in 2018, and the pace of growth will pick up supported by public investment in infrastructure.
Construction in Saudi Arabia will recover, supported by progress on transport and mobility schemes, social infrastructure developments and energy megaprojects.
Healthy economic growth will continue to support the expansion in construction, but infrastructure developments could be hampered by tighter fiscal policy in view of the country’s high public debt.
The construction industry has been improving, but given growing concerns over the 2019 general elections and its economic impact, developers in Nigeria’s real estate sector are apprehensive over-investment in new projects.
A recovery in the construction industry is underway but political uncertainty, rising protectionism and environmental costs due to new planned works could hurt investment and constrain construction output growth.
The outlook for the construction industry remains positive, but the government’s decision to cancel the $13 billion airport project has undermined investors’ confidence.