Despite the ongoing uncertainty over the COVID-19 pandemic, growth in global construction output will reach 5.7% in 2021, following the 2.4% drop in 2020. Although recovering from the COVID-19 crisis, the global industry has borne a huge cost in terms of foregone revenue, says GlobalData, a leading data and analytics company.
According to GlobalData’s latest report, ‘Global Construction Outlook to 2025’, global construction will continue on a recovery path, following the historic collapse in activity in 2020 amid the severe disruption caused by restrictions imposed to contain the spread of COVID-19. From 2022 to 2025, global output growth is predicted to average 3.7% a year.
Danny Richards, Lead Economist at GlobalData, comments: “There is also still great uncertainty over how the COVID-19 crisis will play out, with positive news on the one hand stemming from the successful rollout of vaccines in many markets and concerns on the other hand over the reports of new variants of the virus and challenges in getting vaccines supplies to developing markets. However, the forecast for global construction output is predicated on the assumption that governments and public health authorities will not reintroduce strict lockdown policies and that construction sites will be able to continue to operate with minimal disruption.”
Many markets have managed to regain growth momentum and have already returned to pre-COVID-19 levels. Out of 65 markets that have produced quarterly data for Q1 2021, 25 had recorded year-on-year (Y-o-Y) growth in that period, including China, France, Italy, India and Saudi Arabia.
Richards continues: “With activity levels trending upwards in the absence of restrictions on site works, there are likely to be record high rates of Y-o-Y growth in major markets in the coming quarters given the comparison to periods last year when construction sites were closed or when activity was severely disrupted.
“There are also positive signs for the coming quarters when assessing leading indicators, such as building permits approvals. However, with the surge in construction activity, combined with disruptions to supply chains and high shipping costs, prices for construction materials have soared or remain in short supply. Global steel demand for example has been outstripping supply, and there are reports across major markets of shortages of other key materials, such as timber, cement and aggregates.”