Industrial / Commercial Global Construction Newsletter
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Q4 2024
Executive Summary:
The Global Construction Industry is set to embark on an amazing expansion in the next 15 years growing from $11.5 trillion today to a $20 trillion market, a 75% increase. India, China, USA, Brazil, Saudi Arabia, Vietnam & Canada will be the main countries that fuel this dramatic expansion. The Global construction markets are forecast to grow in the 4th Q of 2024. This growth will be marginal, however this is a positive trend when looking back over the last three years. Infrastructure and industrial related construction will be the construction sectors that drives this growth. The ongoing Israeli, Hezbollah and Hamas conflict has a real possibility of turning into a full-blown war that could escalate to initiate Iran & the USA increasing their military involvement.Appraising the Global Construction Industry in 2024 is not any easy task, however a number of experts / economists and Compass International are reasonably bullish on the remainder of 2024 Construction prospects – as long as no new major events such as regional wars, a new COVID strain, social unrest & fuel / material price spikes.
Some good news: it appears that the US economy and construction sector will not experience a full-blown economic recession as we move further into 2024. The Global energy transition and the retreat from fossil fuels will continue to have a major impact on the Global Construction industry now and in the future.
| Countries | 4th Q 2024 & GDP Growth | 4th Q 2024 % Inflation | 4th Q 2024 Unemployment | Comments on Construction in 4th Q of 2024 Future Spending Activity |
|---|---|---|---|---|
| USA | 2.9 - 3.3 | 2.6 - 3.2 | 4.1 | Extreme shortages of skilled labor such as
Pipefitters, Welders, Electricians and
Instrumentation technicians continue to be a
serious problem to the US construction industry.
US construction inflation will continue to remain in the 2.6% to 3.2% range for the next 3 to 6 months. Lower interest / borrowing rates will positively impact the US Commercial / Housing sector. The good news for the US construction sector continues, we have seen various announcements of plans to build a number of Electrical Vehicle Manufacturing / Battery Facilities, Semi-Conductor / Computer Chip Facilities, Call Centers, Logistical Centers and Fulfillment type facilities in many regions across the country. The USA is making noteworthy advances over some of its economic rivals with the CHIPS / Science act passed in mid-2023 and costing more than $50 billion that funds various computer chip manufacturing / high-tech facilities. The USA construction sector is experiencing a boom in new EV manufacturing& battery production facilities along with computer chip facilities & call centers that have recently been announced. This surge in spending is expected to continue into Q4 2024 and possibly beyond. |
| Canada | 0.7 - 1.0 | 2.4 - 2.8 | 6.6 | Ontario, British Colombia and Quebec appear to
be the busiest Canadian Provinces for
construction, with a mixture of Commercial,
Infrastructure, Industrial and Residential
construction activity. Canadian unemployment is currently at 6.6%, with construction marginally higher at 6.8% to 7.3%. The Canadian infrastructure, civil engineering, mining and Oil & Gas construction sectors are experiencing a pick-up as we move further into 2025.5 |
| Brazil | 2.8 – 3.5 | 4.2 – 4.5 | 6.7 | The Brazilian construction sector is estimated to
be a $125 to $145 billion market or close to 6.5%
of the country’s GDP. Not a lot to report on future 2024 / 2025 construction activity, Brazil is still in a recovery mode after 2 / 3 tough years related to COVID. Brazil’s political and economic situation appears to be in a state of flux. Inflation / escalation inflation in Brazil is running close to 4.3% which is a big improvement to 6 months back |
| United Kingdom | 0.6 – 0.9 | 2.2 – 2.5 | 4.2 | Since the 4th of July General Election the UK
Pound has fallen to 1.35 / US $ a drop of 8% to
the US Dollar in 4 months., not a particularly
good start to the Labour Government handling of
the economy. Construction activity in and around London is still reasonably active. The recent bankruptcy of ISG the UK’s 6th largest General Contractor is very damaging to the UK's consutruction sector. |
| Germany | 0.2 – 0.4 | 2.1 – 2.4 | 3.5 | The German construction industry is forecast to
see zero growth in 2024 German CAPEX costs
are forecast to decline by 5% over the previous
year. Germany has just signed a major deal with Norway to purchase a large amount of gas over the next 20 years valued at many billions of dollars. |
| France | 1.1 – 1.3 | 2.2 – 2.6 | 7.4 - 7.7 | Latest feedback from France is that the
Construction Industry should see an uptick in
construction activity in 2025. Numerous French CAPEX projects were put on hold in 2023 due to the Russian / Ukraine conflict. Construction activity in France is gradually starting to improve. The French Government is projected to increase future expenditures on new and refurbished roads, bridges, ports / airports and rail facilities. France’s inflation rate is improving at 2.5%, look for this rate to start to trend downwards in the next 3 to 6 months. |
| Russia | 3.2 – 3.8 | 7.9 – 8.9 | 2.4 – 2.8 | Unfortunately, the Russia-Ukraine conflicts has
impacted the Global Economy and Global
Construction Sector, look for this problem to
continue until a peaceful solution can be found. Are sanctions against Russia working? Not really. The Russian Ruble is currently performing reasonably well against other major currencies, the Russian Ruble has been resuscitated by enhanced crude oil exports to both China and India. |
| Japan | 0.3 – 0.6 | 2.3 – 2.6 | 2.3 – 2.6 | Japan’s construction industry is forecast to grow
by 0.5% in 2024 very similar to previous years. Japan's construction industry for the sixth year continues to experience slow or minimal growth in its civil / infrastructure, home building, commercial, institutional and industrial sectors, perhaps mirroring Japan’s steadily declining and aged population. |
| China | 4.4 – 4.8 | 0.6 – 0.8 | 5.1 – 6.1 | The construction sector in China is slowing down
as we move further into 2024 / 2025, it appears
that the overall economy is facing challenges.
2024 will be a less than stellar year for the
Chinese construction sector. China (the world’s 2nd largest economy) is still dealing with the adverse impact of the COVID virus, the demand for new housing, together with the weakness of pre-owned property prices and less demand for Chinese products / exports around the world are the basic reasons for this rapid slowdown in China. China has some challenges that have slowed down the overall economy and construction sector. However, GDP growth is still reasonably high at 4.5%. China’s Government reported inflation of 0.5% in 2024 which is very low compared to other major countries, this rate is possibly open to interpretation similar to the low COVID casualty rate reported by China, some economist believes the real rate is between 0.8% and 1.2%. |
| India | 6.5 – 6.8 | 2.9 – 3.6 | 7.8 – 8.34 | India’s construction sector has been growing at a
record pace in the last 5 years. India is set to
become the 3rd largest construction market by
2025 only trailing the USA and China. Will we see
India overtake China in the next decade? Stay
tuned…….. The Indian construction industry is forecast to be in the $0.65 to $0.75 trillion range by the end of 2024. Construction is close to 11.5% of India’s GDP and one of India’s top 3 industries. The Indian construction market is forecast to be a $1.25 to $1.30 Trillion market by the year 2030. India has overtaken China in as the world’s most populated country in 2024, with a population of 1.45 billion. India and China are serious rivals, both countries have stationed a significant number of troops on the disputed border region that could turn out to be a “ticking time bomb” now and in the future. |
