Global construction momentum has continued on a steady improving trend, with the overall score standing at 0.72 in January, having recovered from the widespread disruption caused by measures imposed earlier in the year to contain the Covid-19 pandemic. There are still major challenges ahead for the industry, given the widespread damage that Covid-19 has inflicted upon economic activity around the world, and also the reimposition of Covid-19 containment measures in key markets globally. This in part contributed to the slight drop in the momentum score for projects in execution in January, but on a positive note, there was an upturn in momentum for projects in the pre-execution stages, providing some scope for optimism regarding the progress of projects towards execution. In January, the score for projects in execution fell back to 0.78 (from 0.82 in December) while for projects in pre-execution stages, the score jumped to 0.38.
Momentum in Western Europe recorded in January from a weak period in December, but renewed Covid-19 restrictions across the region are likely to have contributed to the region’s momentum score remaining below the recent highs of October-November. Although the construction industry has in many markets been exempt from the restrictions, there has been wider disruption and the latest developments are likely to have weighted on investor confidence. Momentum scores have been steadily trending downwards in both Germany and the UK in recent months.
The CPMI score for China remains relatively high compared to the global average, but overall momentum has yet to return to the pre-Covid-19 levels recorded in Q4 2019. For North-East Asia (excluding China), the momentum index has stayed high, bolstered solid momentum for projects in execution. In South Asia, the momentum score remains in a relatively healthy position compared to the severe weakness in the second quarter, and this reflects the recovery in India. In South-East Asia project momentum has been relatively stable in recent months, but there have been mixed performances among the main markets in the region while in Australia the project momentum score has continued to trend upwards.
Latin America again posted the lowest momentum score among all the major regions, a reflection of the ongoing challenges facing the region’s construction industry. However, the overall momentum score has remained positive in recent months, which reflects ongoing positive momentum behind projects in execution, which has been offset by sluggish performance among projects in pre-execution stages. The project momentum index in North America increased further in January, but it is still below the recent high reached in September and is also below the levels of Q1 2020.
The Middle East and North Africa region has continued to post relatively high momentum scores in recent months, suggesting the region has managed to stabilise while in Sub-Saharan Africa the construction project momentum index has remained on an improving trend since September.
GlobalData’s Construction Project Momentum Index (CPMI) provides an assessment of the health of the construction project pipeline at all stages of development from announcement through to completion. The CPMI reflects the pace of change in projects as they progress through stages prior to the start of construction as well as charting the course of progress for projects in the execution phase. For every project that is updated, scores are assigned that reflect the extent to which the latest development is positive, negative or neutral, within a range of -5 to +5. These scores are then weighted by the relative value of the project to the respective country’s overall project pipeline value to generate an overall momentum index score.