Global construction market to hit US$15tril by 2025

PETALING JAYA: Construction output will grow by more than 70% to US$15 trillion (RM48 trillion) worldwide by 2025, according to the latest Global Construction Perspectives and Oxford Economics report.

The global benchmark study shows the meteoric growth which outpaces that of global GDP will be concentrated in China, India and the US. The report said these three countries will account for almost 60% of all global growth, and the construction market in Western Europe will be almost 5% smaller by 2025 compared with 2007. Emerging Asian markets are expected to take advantage of the China slowdown.

According to Global Construction Perspectives executive director Graham Robinson, world construction markets are at a tipping point already, with 52% of all activity in emerging markets today.

"We expect to see this increasing to 63% by 2025 with China and India contributing most to growth in emerging markets," he said.

China overtook the US to become the world's largest construction market in 2010 and is expected to increase its global share to 26% in 2025 from 18% today, despite an expected slowdown. India will overtake Japan as the third largest construction market with annual growth averaging 7.4% and is expected to exceed China.

Significant opportunities have arisen for a new generation of "Asian tigers". Indonesia, Vietnam and the Philippines are becoming increasingly attractive for export-oriented manufacturing and are representing a US$350 billion construction market growing at more than 6% annually.

According to Jeremy Leonard, director of industry services at Oxford Economics, while China is the key market, it would be a mistake to ignore the transformations happening elsewhere in Asia which will help boost construction in Asia-Pacific.

Bruno Lafont, chairman and CEO of global building products Lafarge, said by 2050, there will be two billion additional city dwellers, and sustainable urbanisation will be a major construction challenge. The industry must strive to find innovative new products and solutions to contribute to building better cities.

This article first appeared in The Edge Financial Daily, on July 19, 2013.

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