Building Investment (November-December 2021)

OUTLOOK
Other projections for the industry to 2030
include:
• Predicted average annual growth
in construction of 3.6% per annum
– faster than either the services or
manufacturing sectors.
• The next decade for construction
will see global growth up by 35%
compared to the previous decade,
driven by unprecedented levels of
stimulus spending on infrastructure
and the unleashing of excess
household savings; it will represent
more than 10% of GDP in North
America.
• Global infrastructure construction is
forecast to grow by an annual average
of 5.1%.
• Annual growth in UK infrastructure
is expected to average 3.7%, rivalling
China over the period as UK mega
projects provide heightened growth.
3.6 3.5
GLOBAL CONSTRUCTION GROWTH BY SUBSECTOR
% CAGR
6
Construction
Housing
Non-housing
5
5.1
Infrastructure
4.5 4.6
4
4.0
3.7
3
3.2
2.8 2.9
2.5
2.2
2
2.1
1.4
1
0.8
0.6
0%
2015 - 2020 2020 - 2025 2025 - 2030 2020 - 2030
Source: Oxford Economics/Haver Analytics
Growth in construction output is forecast to average 3.6% per annum over the decade to 2030 – higher than either the manufacturing or services sectors.
(Source: earlymetrics.com)
In Malaysia, the construction sector is expected to remain
subdued in the short-term despite the government’s revival
of some mega infrastructure projects such as the East Coast
Rail Link (ECRL) project and LRT3. The sluggish property
market, led by a large volume of unsold private houses amid
weak housing demand combined with a high level of office
vacancies, continues to be a drag on construction investment.
Nonetheless, we still expect a pickup in the latter half of the
forecast period as excess capacity is gradually being absorbed
amid still respectable economic growth. Furthermore,
Malaysia’s favourable demographics will aid longer-term
growth, particularly in the residential sector.
Graham Robinson, Global Infrastructure and Construction
Lead at Oxford Economics and lead author of Future of
Construction, said: “It is unusual to see construction
outstripping growth in both services and manufacturing over
a more sustained period. We would normally expect to see
construction growing faster than other sectors of the economy
for shorter periods in a cyclical upturn. However, it’s not
surprising that construction is expected to power the global
economy over this next decade, considering the unprecedented
nature of the stimulus spending on infrastructure by
governments and the unleashing of excess household savings in
the wake of COVID-19.”
26 November-December 2021 | www.b-i.biz