The size of the global construction market is currently valued at approximately 7 trillion dollars as of 2021 and based on current market trends this value is expected to double within the next decade based on CAGR estimation of about 7 % between 2022 and 2030. The term construction is in essence associated with building of any type of structure, the maintenance repair and renovation of these structures and development of land, roads and public facilities. The industry also encompasses structural additions and demolition of structures all of which requires planning and financing. Revenue projections of the entire industry include revenues earned by organizations that build, demolish or renovate building and as well as projects are associated with utility systems, roads and bridges. Construction equipment rental companies providing equipment such as mini excavators and skid steers for hire are also included. However, the forestry, agricultural and mining industries are not included under the scope of the construction industry.
Demand for construction has been increasing steadily across the globe and especially in emerging economies due to the rapid growth of these economies fuelled by increased income in developing nations and lower rates on interest rates developed nations. . Other factors that have influenced the rapid demand for construction included foreign direct investments into construction, rapid advancements in technological and massive infrastructure development by governments that further invigorates growth. Opposing factors such as the level of volatility associated with the prices of raw material, increasing concern with regards to the wellbeing of construction workers who are generally subjected to lower wages and environmental concerns are the only factors that are restraining the growth of the construction market from 2022 to 2030. These elements are however somewhat neutralised by the consistent demand by governments for infrastructure development and advanced technology in machines and equipment that are able to significantly reduce project completion time frame which present opportunities to current market players.
Market Segmentation & Scope
The market in general is segmented or categorised based on type of construction, the sectors it serves, and as well as the geographical region that the project is being executed. With regards to construction type the market is split into two distinct factions which are mainly new construction projects and re-development projects. Pertaining to sector, the construction industry is divided into six sectors which are residential, commercial, infrastructure, industrial, energy, and lastly utilities construction. The commercial, residential and industrial sectors are divided into further categories that are more definitive, for example the segment for commercial construction includes office, retail, luxury buildings and as well the entire hospitality spectrum (hotels, restaurant, entertainment) and even sports facilities such as indoor and outdoor stadiums among others. As for residential construction, this segment it is categorised into three primary components which are luxury, mid-tier, and affordable residences. The industrial construction component on the other hand encompasses manufacturing plants, chemical facilities, and material processing plants. Infrastructure construction is categorised into marine and inland infrastructure. The energy construction sector mainly includes oil and gas associated buildings and infrastructure, hydroelectric dams, communication infrastructure and power grid infrastructure.
The biggest percentage of the global construction market comes from the Asia-Pacific region as construction in this region far supersedes projects in other regions and is expected to continue until 2030. The growing population in these regions is among the primary drivers that fuels construction in countries such as Indonesia, India, China and Vietnam just to name a few. Market drivers that fuel the market in these countries include the advancements in technology, lighter regulatory boundaries and support from the government of nations in these regions. Among the major construction industry players in this region includes Tata Projects, China State Construction Engineering Corporation, L&T, KEC International Ltd., China Railway Group Ltd., and Shapoorji Pallonji Co.