Amid a series of worldwide health, geopolitical, and economic crises that have left many construction markets currently stagnant or in decline, contractors are eager to gain insight into the future. Fortunately, there’s promising news from Global Construction Futures, a comprehensive study of the global construction and engineering industry conducted by a team of construction economists at Oxford Economics. According to this study, the future appears bright. Over the next 15 years, global construction activity is projected to expand by more than US$4.2 trillion, growing from US$9.7 trillion in 2022 to a staggering US$13.9 trillion by 2037.
In this future landscape, China, the United States, and India are set to play pivotal roles, collectively accounting for half of all construction and engineering work globally by 2037. This underlines their significance in driving the economic development of these three nations, which together represent over a third of the world’s population and economic output.
Furthermore, the top ten global construction markets are expected to contribute to 70% of all construction projects by 2037, amounting to a market worth over US$9.7 trillion, approximately equivalent to the current global construction activity.
Interestingly, the ASEAN tiger economies, comprising Hong Kong, Singapore, South Korea, and Taiwan, alongside India and Bangladesh, are poised for remarkable growth in the period leading up to 2037. Notably, India is anticipated to outpace the United States in terms of construction growth over the next 15 years, becoming a nearly US$1 trillion global construction powerhouse.
While China may experience a slowdown in construction growth due to its declining population and aging workforce, residential construction is still expected to surge by over US$500 billion during the same 15-year span.
In the United States, a notable drop in the value of residential construction work is anticipated, followed by a more sustainable growth period after the turbulence experienced during the COVID-19 pandemic. The forecast suggests that US construction activity will increase by nearly 30% over the next 15 years, reaching over US$1.8 trillion by 2037, largely driven by the Inflation Reduction Act and its focus on cleaner energy and climate policies, attracting significant private capital.
Policymakers in the United States have prioritized infrastructure investment post-COVID-19, with infrastructure construction expected to become the strongest-performing sector, especially as rising interest rates reduce demand for new housing.
In the United Kingdom, robust growth is expected, particularly in Western Europe, driven by mega infrastructure projects such as the HS2 rail and new nuclear power plants, alongside a green transition that fosters substantial growth in energy generation and transmission infrastructure.
Within the European Union (EU), the next five years are poised to witness significant growth fueled by large-scale infrastructure programs aimed at achieving net-zero carbon emissions. These initiatives include the €800 billion (US$863 billion) EU Next Generation fund, with Spain and Italy being key beneficiaries, and the EU Renovation Wave, which aims to double the renovation rate of both residential and non-residential buildings while reducing greenhouse gas emissions by 60% by 2030.
Eastern Europe, which experienced a decade of stagnation in construction from 2012 to 2022, is expected to see a revival. Geopolitical uncertainties and a desire for increased supply chain resilience have reignited construction fortunes in the region, with a projected growth of over US$180 billion (US$194 billion) by 2037, marking a 40% increase from 2022.
In Ukraine, external financial support will remain crucial for maintaining fragile macroeconomic stability. Joint efforts by the United States, the EU, and the G7 are expected to provide a regular inflow of around US$3 billion per month, meeting Ukraine’s fiscal deficit needs. Additionally, a new IMF program is expected to further support the country’s recovery.
Collectively, these insights indicate that the global construction industry is poised for substantial transformation, presenting significant opportunities within the sector.
