Civil engineering drives industry, while economic conditions still weigh on residential construction activity
We expect global construction output to increase by 2.0% in 2024 (up 3.7% on 2023). Growth in advanced economies is predicted to be 1.8%, while building activity in emerging markets will likely increase by 2.2%.
China’s ongoing real estate turmoil and downgraded investment profiles are weighing on global construction prospects. Materials and labour costs remain high in many economies, which has led to pressure on margins and reluctance to commit to building projects.
Global residential construction is forecast to level off in 2024. High interest and mortgage rates are squeezing household budgets and reducing demand. Demand for housing is likely to remain sluggish until wider economic conditions improve and central banks start to decrease interest rates.
Infrastructure projects drive demand
We expect non-residential output and civil engineering to increase by 2.8% and 4.4% respectively this year. Governments worldwide continue to champion major infrastructure projects to boost their economies’ productive potential and to bolster their economies as other areas struggle amid tighter monetary policies.
Residential construction to recover in 2025
In 2025 we forecast global construction to grow 1.8%. Residential construction output is expected to rebound by 2.4%, as economic conditions should improve, and looser monetary policies start to show their effect.
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