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1、GLOBAL CONSTRUCTION FUTURESA global forecast for the construction industry to 2037Published by:Oxford Economics Limited 4 Millbank,Westminster London SW1P 3JA United KingdomT+44(0)20 3910 8000 Published on 16 March 2023 Copyright Oxford Economics Limited 2023The reproduction or transmission of all o

2、r part of the report,whether by photocopying or storing in any medium by electronic means or otherwise,without the written permission of Oxford Economics Limited,is prohibited.Disclaimer:All information provided in this report is for information purposes only.Although every reasonable effort is made

3、 to ensure the accuracy of the report,it should not be relied upon for decision making purposes,as the information contained in the report is not tailored to the requirements of individual businesses.Oxford Economics Limited and the authors accept no liability for any loss or damage caused by the us

4、e of this report.The modelling and results presented in this report are based on information provided by third Parties,upon which Oxford Economics has relied in producing this report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projectio

5、ns shown.To discuss the report further please contact:Dr Nicholas Fearnley .auGraham Robinson Jeremy Leonard Design by chrome-dome.co.ukGLOBAL CONSTRUCTION FUTURESA global forecast for the construction industry to 2037AcknowledgementsProject Leaders and Principal AuthorsDr Nicholas Fearnley is Head

6、of Global Construction Forecasting at Oxford Economics and is based in Sydney.Nicholas overseas the teams that produce the various construction,mining,and maintenance studies.He works over the full construction spectrum,and regularly presents and provides commentary for both the construction and min

7、ing .auJeremy Leonard is Managing Director of Global Industry Services at OxfordEconomics and is responsible for overseeing the work of the industry forecasting team and managing the operation and output of the 77-country and 100-sector Global Industry Model as well as related consultancy Graham Rob

8、inson is Global Infrastructure and Construction Lead at Oxford Economics and is one of the worlds leading construction economists,according to Engineering News Record(ENR).He leads on consultancy assignments and is author of many industry reports and writes regularly for journals and other media.He

9、is also Global Business Consultant at Pinsent Masons LLP,the worlds leading international law firm for construction,and works closely with the Institution of Civil EKey ContributorsPeter Colson Senior EconomistJielin Ding Economic AnalystLiam Gilroy EconomistAlex Koutalistras Economic AnalystMatthew

10、 Mercer Assistant EconomistAmy Regan Senior EconomistApril Skinner Senior EconomistSophia Sultanova EconomistHamish Thomas Research AssistantPhil Thornton-Economics EditorThe authors and Oxford Economics thank the leadership team at Aon Global Construction and Infrastructure for their leadership and

11、 considerable input as well as being lead global sponsor for Global Construction Futures.We also thank our global sponsors Gleeds,Institution of CivilEngineers,Mott MacDonald,PwC,Royal Institution of Chartered Surveyors,Rider Levett Bucknall and WSPfor their considerable support.We thank the industr

12、y experts who have provided contributions within this report.Their contributions are acknowledged.The team is grateful and acknowledges the support of organisations who have supplied material,contributed to production,and provided photographs.These are credited throughout the report.Who to contact a

13、bout Global Construction FuturesFor clients and contacts in Australia and wider Asia Pacific Region:Dr Nicholas Fearnley,Head of Global Construction Forecasting,Oxford Economics .auFor clients and contacts in EMEA and Americas:Graham Robinson,GlobalInfrastructure and Construction Lead,Oxford Economi

14、cs or Jeremy Leonard,Managing Director,Global Industry Services,Oxford Economics ForewordThe global construction sector is at an inflection point and at a pivotal moment of transformation,marked by both unprecedented challenges and remarkable opportunities.The imperative to decarbonise our world has

15、 taken centre stage.Climatechange has become a pressing reality that demands swift and decisive action.Decarbonisation is about more than reducing greenhouse gas emissions;it encompasses a holistic approach that integrates sustainability across the entire construction value chain.From design and pla

16、nning to material selection,construction methods,and building operations,every aspect of the industry must be reimagined and reengineered to achieve carbon neutrality and enhance resilience.The sector shapes the physical environment and is uniquely positioned to drive the transition to a low-carbon

17、future.The buildings and infrastructure we create today will define our collective impact on the environment for future generations and decades to come.By embracing the principles of sustainable construction,we can create energy-efficient buildings,leverage renewable energy sources,and adopt circula

18、r business models that not only minimise waste but also maximise resource efficiency.The path to decarbonisation requires collaboration and innovation on an unprecedented scale.Governments,businesses,investors,and communities must come together to set ambitious targets,develop supportive policies,an

19、d invest in research and development.The construction industry must embrace a new mindset that prioritises sustainability,resilience,and responsible business practices.Emerging technologies will revolutionise the construction industry.These tools can optimise design processes,enhance project managem

20、ent,and enable real-time monitoring of energy consumption and carbon emissions.By leveraging data-driven insights,stakeholders can make informed decisions that minimise environmental impact while maximising economic value.Decarbonisation is not without its challenges.Cost implications,regulatory fra

21、meworks,and the need for upskilling the workforce are amongst the hurdles that must be considered in parallel.However,by leveraging the collective expertise and experience of industry leaders,and by collaborating across sectors,we can navigate these challenges and turn them into opportunities for in

22、novation and growth.At PwC,we are committed to being at the forefront of this global transition.When you bring together the right sector insight,expertise,and technology,you bring decarbonisation within reach.And when you combine it with the right mindset,you transform the need to decarbonise from o

23、bligation into commercial opportunity.Paul Sloman Partner,UK Engineering and Construction Sector Leader,PwC United KingdomChris Temple Partner,Net Zero Transformation Leader,PwC United KingdomDaryl Walcroft Partner,Global Engineering and Construction Sector Leader,PwC United S6Global Construction Fu

24、turesA global forecast for the construction industry to 2037MAD Architects:Hainan Science and Technology Museum in Haikou City,China.Where Nature and Technology Meet includes permanent exhibition space,a planetarium,a giant screen theatre,and a flying theatre.Lead Global SponsorGlobal SponsorsAon pl

25、c(NYSE:AON)exists to shape decisions for the better to protect and enrich the lives of people around the world.Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow t

26、heir business.PwC helps organisations and individuals create the value theyre looking for.Were a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality industry focussed assurance,tax and advisory WSP is one of the worlds leading professional services

27、 firms,bringing together talented people from around the globe.We provide strategic advisory,engineering,and design services to clients in the transportation,infrastructure,environment,building,power,energy,water,mining,and resources sectors.Our 65,000 trusted professionals are united by the common

28、purpose of creating positive,long-lasting impacts on communities we serve through a culture of innovation,integrity,and Gleeds is an international property and construction consultancy with over 135 years experience in the property and construction industry.With circa 2,500 dedicated staff across si

29、x continents and 80 offices,Gleeds prides itself on being a global business that is structured to act and think locally.Working with clients in almost every sector,Gleeds services the entire project lifecycle and categorises its offering into the following core areas:programme and project management

30、,commercial and contract management,property,and asset management and RLB is an independent global construction and property consultancy providing management and advice throughout the built environment We are committed to creating value for our clients,achieving commercial success,project and progra

31、mme success and optimised assets to projects across the world.We do this through our extensive expertise in cost management and quantity surveying,project and programme management,asset advisory and specialist consultancy.Throughout our long history,our 4000 people,working across 40 countries,have m

32、ade a difference to our clients by combining fresh perspectives with sector Were a global engineering,management and development consultancy.Our purpose is to improve society by considering social outcomes in all we do,relentlessly focusing on excellence and digital innovation,transforming our clien

33、ts businesses,our communities and employee opportunities.Our network of experts looks at problems from fresh angles and finds opportunities in With 95,000 members worldwide,ICE promotes and advances civil engineering around the globe.We lead the infrastructure debate to create a more sustainable fut

34、ure and ensure high standards through awarding professional qualifications.www.ice.org.ukAs a globally recognised professional body,everything we do is designed to effect positive change in the built and natural environments.With over 134,000 highly qualified trainees and professionals,and offices i

35、n every significant financial market,we are ideally placed to influence policy and embed our standards within local marketplaces to protect consumers and businesses.www.rics.org8Global Construction FuturesA global forecast for the construction industry to 2037Zaha Hadid Architects:Zhuhai Jinwan Civi

36、c Arts Centre,Guangdong Province,China.Located at the heart of Jinwan districts Western Ecological New Town and designed as a hub of contemporary creativity within one of the worlds most dynamic region.9Global Construction FuturesA global forecast for the construction industry to 2037ContentsGlobal

37、Construction FuturesGlobal Construction Futures 10China,US,and IndiaGlobal construction superpowers drive growth with Emerging Asia and sub-Saharan Africa highest growing regional markets 12Residential housingWorries mount over repeat of global financial crisisbust 15ChinaShort-term growth to drive

38、recovery but longer-term structural challenges leadto weaker growth 16United StatesSlump in residential construction driven by higher interest rates 18IndiaPopulation growth to drive global construction superpower 21UKFastest growing construction market in Western Europe supported by infrastructure

39、mega projects 23AustraliaA giant resources market that also benefits from servicesgrowth 24ASEAN TigersFastest growing construction markets globally in Indonesia,Philippines,and Vietnam,supported by strong fundamentals 26Western EuropeRegains position as second-largest construction market,but growth

40、 prospects to dim later 28Ukraine,Turkey,and Eastern EuropeHeightened growth expected from reconstruction of Ukraine,and post-earthquake rebuilding in Turkey 30LATAMCatch-up from lost decade of recession and IMFdriven austerity 32Saudi Arabia and MENASupersized Giga Projects drive growth and diversi

41、fication 34Monetary PolicyNormalisation of rates brings inevitable near-term headwinds for construction markets globally 36Green construction and climate changeArguably the construction industrys greatest challenge globally 37DigitalisationTransformative for construction productivity as well as driv

42、ing mass decarbonisation 38Higher materials pricesImpact construction volumes globally 40Why we need to decarbonise the construction value chainand how its going to be harder than it may seem 42Oxford Economics Global Construction ServiceGlobal Construction Futures is a major study of the global con

43、struction and engineering industry published by the renowned team of construction economists at Oxford Economics.The main studyseparately available to Oxford clients as a part of our GlobalConstruction Servicecomprises an almost 600-page report and detailed examination of all major construction mark

44、ets globally with forecasts over the next 15 years to 2037.Who to contact about Global Construction FuturesFor clients and contacts in Australia and wider Asia Pacific Region:Dr Nicholas Fearnley,Head of Global Construction Forecasting,Oxford Economics .auFor clients and contacts in EMEA and America

45、s:Graham Robinson,GlobalInfrastructure and Construction Lead,Oxford Economics or Jeremy Leonard,Managing Director,Global Industry Services,Oxford Economics 10Global Construction FuturesA global forecast for the construction industry to 2037Global Construction FuturesExecutive SummaryGlobal Construct

46、ion Futures is a major study of the globalconstruction and engineering industry published by the renowned team of construction economists at OxfordEconomics.Global Construction Futures is sponsored by the leadership team at Aon Global Construction and Infrastructure and prominent global business lea

47、ders in the construction and engineering industry with the purpose of understanding the global market and the forces shaping future demand.These sponsors combined employ over half a million people across the sector and all have a significant role and position in their markets.Global Construction Fut

48、ures is aimed at business leaders,policymakers,and others with a special interest in the global construction and engineering industry.Financial institutions and aspiring leaders of the future will find much of interest in Global Construction Futures.In Global Construction Futures we give an overview

49、 of the health of the global economy and explain how key driversincluding growth in economic output as well as rising populations and urbanisation in emerging marketsare expected to impact growth in key construction markets.This Executive Summary distils key trends while the main report of almost 60

50、0 pages looks in detail and gives forecasts for all major construction and engineering markets globally.Forecasts are given for construction work done in each country as well as for the residential,non-residential,and civil engineering sectors over the next 15-year period to 2037.Oxford Economics al

51、so separately provides a detailed dataset and forecasts of construction work done with annual data over more than a 25-year period from 2010 to 2037 with forecasts for 10 detailed subsectors.This dataset gives the size and growth of construction work done and gross output across some 80 countries gl

52、obally representing over 95%of world output.Rising populations and urbanisation in emerging markets to drive global construction.Key thought leadership boxes are included as a part of Global Construction Futures and are written by leading industry experts and economists.We examine far-ranging global

53、 themes that we believe will have a major impact on the future direction of the industry.These topics include how climate change is impacting construction and how the worlds infrastructure must be adapted to become more resilient to the effects of those changes.We also examine construction inflation

54、 and give a longer-term outlook and forecast of price inflation for building materials in key construction markets making up over 50%of world output.We also look at how digitalisation and modern methods of construction can be combined into industrialised construction to deliver the benefits of helpi

55、ng to drive the wider decarbonisation of built assets and improve productivity across the construction and engineering industry.The decarbonisation of construction supply chains is therefore a key issue covered in Global Construction Futures with the wider built environment accounting for almost 40%

56、of global greenhouse gas emissions.We ourselves look at the normalisation of monetary policies by central banks and how this will impact construction markets.Other leading industry experts provide an interesting survey of expected construction tender price inflation across 20 different countries glo

57、bally.Throughout Global Construction Futures and in this Executive Summary we use the value of work done(also known as the value Put-in-Place)in fixed 2022 prices in US dollars at fixed 2022 exchange rates to measure construction activity.This measures the volume of work done rather than including t

58、he effects of the value of construction work done,which is driven by movements in prices.The value of work done is the value of payments made for construction work undertaken.It includes the cost of labour and materials fixed in place but excludes the value of land and the value of installed machine

59、ry and equipment not integral to the built asset.11Global Construction FuturesA global forecast for the construction industry to 2037We also split construction activity into three broad sectorsresidential building,non-residential buildings,and civil engineering construction for infrastructure.We do

60、not include the construction of mines.We measure both new construction activity and renovations or improvements of existing built assets.We do not include the repair and maintenance of existing built assets,which we define as work that does not change the original design standard or significantly im

61、prove the life of the asset.Digitalisation and modern methods of construction will support the decarbonisation of infrastructure and built assets.Zaha Hadid Architects:Tower C,Shenzhen Bay Super Headquarters Base,China will be an important business and financial centre in Shenzhen serving Greater Ba

62、y Area of Guangdong.12Global Construction FuturesA global forecast for the construction industry to 2037China,US,and IndiaGlobal construction superpowers drive growth with Emerging Asia and sub-Saharan Africa highest growing regional marketsGlobal construction work done will grow over US$4.2trillion

63、 over the next 15 yearsfrom US$9.7trillion in 2022 to US$13.9 trillion by 2037.China,the US,and India will account for 51%of all work done in the global construction and engineering market by 2037underpinning the future economic development of the three countries that account for over a third of the

64、 worlds population and economic output.The top three countries will add almost US$2.4 trillion to global growth in construction work done over the next 15 years.ASEAN tiger economies as well as India and Bangladesh will be the worlds fastest growing construction markets.The top 10 global constructio

65、n markets will account for 70%of all construction work done by 2037 and represent a market worth over US$9.7 trillion in 2037the same size as all global construction work done today.Countries including ASEAN tiger economies as well as India and Bangladesh will deliver super-high growth over the peri

66、od to 2037.Rising populations as well as rapid urbanisation and low average earnings per head of population in these markets will help drive outstanding growth in construction work done.The combined growth of the fastest ASEAN economies plus India and Bangladesh is expected to be US$800 billion over

67、 the next 15 yearstwice the growth of construction work done in the US over the same period.Growth over the next 15 years in India alone is expected be higher than the US as India becomes a near US$1 trillion global construction powerhouse.India is expected to witness a significant urbanisation of i

68、ts population and has the lowest urban density of the largest economies in the world today.The population of India is expected to outsize that of China.Both are at around 1.4 billion people each today.We expect growth in construction work done in China to slow over the next 15 years as population in

69、 China starts to fall.It was announced earlier this year that the population of China shrank for the first time in 60 years.A significant ageing profile in China will mean fewer workers in the economy and a greater strain on savings to support later living and a greater dependency on those in the la

70、bour force.Even given these negative drivers we still expect growth in residential construction work done to exceed US$500 billion in China over the next 15-year period.Elsewhere we expect growth in the UK to be the highest in Western Europe as mega infrastructure projects continue to drive growth a

71、nd the green transition drives sustained and large-scale growth in energy generation and transmission infrastructure.Sub-Saharan Africa remains a sleeping giant with growth in construction work done rivalling Emerging Asia as the fastest growth region globally.The cumulative spending on construction

72、 work done across sub-Saharan Africa is set to reach US$3.9 trillion over the next 15 yearswith Kenya in East Africa and Nigeria in West Africa being fast-growth markets.Behind our global growth forecasts are the other key trends which we set out within the main Global Construction Futures report.Th

73、e report provides comprehensive analysis using our Global Construction Service which gives forecasts of construction work done or gross output for 80 construction markets globally to 2037.We also include detailed forecasts for construction repairs and maintenance across 19 European countries within

74、our European Construction Service.Despite a projected slowing of growth in construction work done in China we still expect growth in China to exceed the US by a significant margin over the next 15 years and we expect India to grow at over three times that of the US.13Global Construction FuturesA glo

75、bal forecast for the construction industry to 2037Bjarke Ingels Group:Google Headquarters,the Bay View Campus,California,is a 1.1 million square feet campus containing three structures with loosely domed profiles that taper towards ground level.The solar skin will generate around 40%of its energy ne

76、eds.14Global Construction FuturesA global forecast for the construction industry to 2037Zaha Hadid Architects:The Henderson is in the heart of Hong Kongs central business district.The 36-storey tower for Henderson Land is within a short distance of both Central and Admiralty MTR metro stations.15Glo

77、bal Construction FuturesA global forecast for the construction industry to 2037Residential housingWorries mount over repeat of global financial crisisbustWithin the global residential housing market,worries are mounting of a repeat of the price crash seen during the global financial crisis 15 years

78、ago that would deal a blow to the construction sector.Residential house prices have fallen rapidly in several economies over recent months and more pain looks likely in 2023.The speed of these declines is comparable to the worst period during the global financial crisis,begging the question of wheth

79、er we are heading for a similar nasty global housing bust.The historic evidence on housing boom-bust cycles is not encouraging.Since 2012,world house prices have risen by around 40%in real termsfaster even than the rises before the global financial crisis.But in the past three cycles around 50%of gl

80、obal real house price gains were reversed in the subsequent slumps.Several factors are thought likely to prevent a steep dive in house prices this time,such as better lending standards during the upturn,a lower level of transactions near the market peak,low inventory of homes for sale,and stronger l

81、abour markets.Foster+Partners:Shenzen DJI Sky City,Shenzen.The new headquarters for Dajiang Innovation HG,the worlds leader in civilian drones and creative camera technology is located in the Nanshan District in southwest Shenzhen,China.16Global Construction FuturesA global forecast for the construc

82、tion industry to 2037ChinaShort-term growth to drive recovery but longer-term structural challenges leadto weaker growthOver the past couple of decades,the Chinese government has used infrastructure investment to offset weakness in other parts of the economy.This approach was repeated in recent year

83、s,both in response to Covid-19,and then to help offset the real estate downturn.Declining returns on investment,however,are reducing the effectiveness of this strategy.The challenge for China over the coming years is to manage the transition from an investment-led growth model to a consumption-led o

84、ne.This transition will take yearsor more likely decadesto achieve.The challenge for China over the coming years is to manage the transition from an investment-led growth model to a consumption-led economy.The residential building market continues to fall following the introduction of tighter regula

85、tions to curb speculation in the real estate market and the 2021 default of Evergrande.A lack of confidence in the sector and high debt levels among large developers and local governments will continue to weigh on activity.However,we think a housing crash remains unlikely and expect real estate comm

86、encements to gradually improve over 2023although this will not be enough to reverse the falls over the first half of 2022with the rebound in actual construction activity coming in 2024.The ongoing trend towards urbanisation,the centralised land-sale programme,and government-backed rental housing con

87、struction will all support residential construction activity for the duration of the forecast period.China also faces the challenge of a falling population,with official data showing its population declined in 2022 for the first time in 60 years.Household formation patterns and continued urbanisatio

88、n will reduce the impact on residential construction activity.A shrinking and ageing population will diminish the labour supply,which will see a widening of the pension safety gap and therefore keep the savings rate elevated.This therefore hinders the governments efforts to rebalance the economy to

89、a consumption-led growth model.The weakening demographic outlook,combined with falling returns on investment,point to a weaker growth outlook for China over the coming years.Construction activity will continue to be supported by government infrastructure investment.The government plans to expand Chi

90、nas transport infrastructure by building 200,000 kilometres of railways,460,000 kilometres of highways,and 25,000 kilometres of high-level sea lanes by 2035.Significant investment in renewable energy solutions,with a key focus on wind and solar power,is also needed for China to achieve its 2060 carb

91、on neutrality target.While these investments will ensure construction activity continues to grow,slower economic growth and diminishing returns on investmentparticularly in traditional infrastructure and real estateare expected to see Chinese construction activity grow much slower than the 5.5%annua

92、l compound rate experienced over the last 15 years.Even with this slowing rate of growth,China will add almost US$1.5 trillion to global construction work done over the next 15 years.Weakening demographic outlook,combined with falling returns oninvestment,point to a weaker growth outlook over the co

93、mingyears.17Global Construction FuturesA global forecast for the construction industry to 2037Skidmore,Owings&Merrill:Alibaba Headquarters,located in Xuhui,one of Shanghais premiere arts and innovation districts,is a new workplace for Alibabas Shanghai campus and turns the typical headquarters insid

94、e out to showcase the multinational companys talent,collaboration,and creativity.The building has an ambitious sustainability programme,exceeding the requirements for LEED v4 and China Green Star certifications.The new headquarters is designed to reduce both embodied and operational carbon.18Global

95、Construction FuturesA global forecast for the construction industry to 2037United StatesSlump in residential construction driven by higher interest ratesWe expect the value of residential construction work done in the United States to undergo a significant slump.The global correction in house prices

96、 that we have already highlighted is expected to lead to a blow out and a reduction of US$150 billion in residential construction work done over 2022 and 2023 before growth resumes in 2024.We do not expect construction work done in the US residential market to return to the same levels seen in 2021

97、until the early 2030s.We expect a US$150 billion blow out in US residential work done,before growth resumes in 2024.This means that the North American construction market will cede its position to Western Europe to become the third largest regional construction market and will not recover its positi

98、on as the second largest regional market during the 15-year period of our forecasts.The construction sector will then see a period of more sustainable growth after the whipsaw in output and subsequent overheating seen over the last couple of years during Covid-19.We forecast that US construction wor

99、k done will grow by almost 30%over the next 15 years to reach over US$1.8 trillion by 2037up by almost US$400 billion.Construction work done in the residential sector grew by an average 7.3%a year over the last decade to 2022.This growth was fuelled by overheating as residential construction work do

100、ne during the recovery from Covid-19 boomed by 25.6%in 2021 alone.Rising interest rates plus a slowdown in population growth will weigh on US residential construction work done.We expect weaker growth going forward compared to the last decade,but total residential construction will still account for

101、 around 40%of the total US construction market in 2037.Growth in single-family residential construction work done is forecast to be significantly higher than growth in multi-family construction.We expect single-family construction work done to be a US$600 billion market by 2037.Construction work don

102、e in the US non-residential market is expected to remain relatively robust,with strong growth in manufacturing and industrial production construction.The CHIPS and Science Act signed into law in August 2022 will provide around US$280 billion in new funding to boost domestic research and onshoring of

103、 semiconductor manufacturing in the US.This has led to significant new factory building supported by new battery plants as well as semiconductor manufacturing facilities.The pandemic has also spurred the development of healthcare infrastructure in the US with many new projects breaking ground in 202

104、2.The Inflation Reduction Act(IRA)looks to spend US$430 billion over 10 years to reduce carbon emissions and extend health insurance subsidies related to the Affordable Care Act.IRA will also see around US$370 billion of financing associated with cleaner energy and climate related policies.It would

105、raise US$750 in revenues over the same period.The IRA will benefit sectors dealing with climate change mitigation efforts,such as electric carmakers and renewable energy.The US Inflation Reduction Act and other spending programmes will support US construction work done.19Global Construction FuturesA

106、 global forecast for the construction industry to 2037Foster+Partners:270 Park Avenue will be New York Citys largest all-electric skyscraper with net zero operational emissions and will be 100%powered by renewable energy sourced from a New York State hydroelectric plant.It will be JPMorgan Chases ne

107、w Global Headquarters,New York City.20Global Construction FuturesA global forecast for the construction industry to 2037Policymakers have targeted infrastructure to drive growth post-Covid-19.With rising interest rates likely to weigh heavily on demand for new housing,the pattern of recent years in

108、US construction will reverse in the short term with infrastructure construction becoming the strongest performing of the three major construction sub-sectors.The US has committed to a carbon neutral economy by 2050 including the production of carbon-free electricity by 2035 and the doubling of offsh

109、ore wind capacity by 2050.The Bipartisan Infrastructure Bill signed into law in November 2021 was a US$1.2 trillion package of spending with US$550 billion being newly authorised spending on US infrastructure.This will continue to boost infrastructure construction work done with higher growth expect

110、ed in the power and utilities sector as well as road and highway construction.Ultra large projects have also made a resurgence in the US and are expected to drive growth with sizeable investments in both energy and power and with manufacturing supported by IRA.The tax credit for domestic electric ve

111、hicle production has seen strong foreign investment inflows from global automotive and electronics businesses.There are also regional differences with states such as Texas expected to be a hotspot in construction activityAustin and San Antonio are expected to be high growth in construction work done

112、 over the next five years.We expect Texas,California,New York,Florida,and Illinois to be the five highest growing states for construction work done over the next five years.Despite additional public funding over the medium-and longer-term,the expected levels of US debt will constrain the ability of

113、the US to fund infrastructure.This will fuel a growing need for public-private partnerships(PPPs)or other infrastructure funding models to evolve further.Foster+Partners:270 Park Avenue,New York City21Global Construction FuturesA global forecast for the construction industry to 2037IndiaPopulation g

114、rowth to drive global construction superpowerIndia is expected to surpass China and become the most populated country in the world this year.Unlike China,Indias population is forecast to continue growing,and is set to pass 1.5 billion by 2030.While economic development and urbanisation are slowing p

115、opulation growth,the increasing size of the working age population will support economic growth over the next two decades.However,low labour force participation and poor access to education will limit upside potential of this demographic tailwind.Strong demographics will see India surpass Germany an

116、d become the third largest global construction market before the end of the decade.Civil engineering will be the fastest growing sector,as the government continues to invest heavily following the coronavirus lockdowns.Utility construction will be supported by ambitious programmes such as the Jal Jee

117、van Mission,which aims to ensure access of piped water for every Indian household by 2024,and the Revamped Distribution Sector Scheme,which aims to improve the power supply to the Punjab region.Programmes such as these will not only support the construction sector but will drive significant quality

118、of life improvements across the country.However,there are risks to the outlook.Greater funding is required for projects already under construction,as higher input costs are straining budgets and capacity constraints are causing project delays.The INR 5.4 trillion Bharatmala Program to build 34,800 k

119、ilometres of roads from 2017 to 2026 is only 25%complete.The role of the public sector in driving construction growth means that the outlook is heavily influenced by the governments ability and willingness to finance this work.The challenge for India is to find a way to encourage more private sector

120、 investment.Incentivising private investment was a key theme in the most recent budget and is the key challenge facing the Indian construction market over the coming years.The challenge for India is to find a way to encourage more private sector investment.Adrian Smith+Gordon Gill Architecture:The I

121、mperial 3,shown as a concept design,is a 400m(1,312 ft.)116-storey supertall residential skyscraper located in South Mumbai.The Imperial 3 would be one of Indias first supertall skyscrapers to achieve a LEED Platinum rating for environmental sustainability from Green Building Council.22Global Constr

122、uction FuturesA global forecast for the construction industry to 2037Bjarke Ingels Group:Google Kings Cross centrally located near the railway complex formed by Kings Cross and St.Pancras stations,Googles future London base will be the companys first wholly owned and designed building outside the US

123、.The new 11-story building will be part of a large campus that will include Googles current base at 6 Pancras Square and a third construction.23Global Construction FuturesA global forecast for the construction industry to 2037UKFastest growing construction market in Western Europe supported by infra

124、structure mega projects We expect the UK to be the fastest growing construction market in Western Europe over the next 15 years,supported by a range of infrastructure mega projects following decades of underfunding.The UK has suffered from long-term underinvestment in its infrastructure and housing

125、which means that large deficits have built up and the UK government has been determined to see through several game-changing infrastructure mega projects that will support growth in the medium-to longer-term.The High Speed 2(HS2)rail project from London to Birmingham and on to Manchester and Leeds i

126、s currently the largest infrastructure project in Europe but drawdown of project contingency funding caused by rising costs may lead to some rescoping of the project to contain costs.The construction of nuclear power plants in Hinckley and Sizewell will also support the transition to renewable power

127、 by 2035 while investment in large offshore wind power and Carbon Capture,Utilisation,and Storage(CCUS)technology will support carbon neutral generation.The development of Small Modular Reactors(SMRs)could support greater investment in nuclear energy but will take time to realise.The Road Investment

128、 Strategy 2(RIS2)to 2025 has suffered setbacks from planning delays and project implementation.The next Road Investment Strategy 3(RIS3)is expected to focus on lowering embodied carbon in the construction of new roads in the UK and a greater emphasis expected on the maintenance and upgrade of existi

129、ng roads rather than large complex new construction.The condition of the existing roads network in the UK needs to be improved although the GBP2.5 billion Pothole Fund announced during Covid-19,to repair the equivalent of 10 million potholes in Britains roads,has had some effect as seen in the lates

130、t road condition surveys.Several game-changing infrastructure mega projects will support growth in the medium-term,but growth looks set to slow.The UK needs to continue to look at more innovative funding models to support further private capital investment in infrastructure and has set up the UK Inf

131、rastructure Bank to support investment in UKinfrastructure.Tax rises to pay for the burgeoning cost of healthcare and the National Health Service in the UK as well as significant government expenditure to support Britains economy during Covid-19 mean that household finances are significantly squeeze

132、d.With rising interest rates weighing heavily on the residential market,we expect much slower growth in residential work done going forward compared with the last decade.The non-residential construction market has been supported by the super deduction tax incentive,which allows deduction of up to 13

133、0%of allowable capital expenditure before profits,is due to end in March 2023.This has effectively brought forward high growth in expenditure on industrial construction work done over the last two years.Investment in commercial construction in the UK has been supported by growth in the tech and medi

134、a sectors with significant investment in both London and the rest of the UK by the large tech players.The new Google headquarters building for Europe in Kings Cross,London,is an example and with investment in film studios by Netflix and others.24Global Construction FuturesA global forecast for the c

135、onstruction industry to 2037AustraliaA giant resources market that also benefits from servicesgrowthAustralia is rich in mineral and energy resources,and so the mining sector creates significant demand for construction activity.While we do not capture the construction of actual mines,we do measure w

136、ork on associated infrastructure such as railways and harbours used to transport commodities.Indeed,Australias most recent mining investment boom drove transportation construction activity to what was then a record level as mining companies invested heavily in railway and harbour infrastructure.A we

137、aker economic outlook for China is expected to weigh on mining investment.The move towards Net Zero will also create several challenges and opportunities,as high carbon energy exports are replaced by new minerals needed to support the renewable energy transition.Australia is typically seen as a reso

138、urce-based economy,which is somewhat misleading as services account for 75%of GDP.We expect relatively strong population growth,supported by the continuing trend of highly skilled migrants moving to the Anglosphere,will continue to drive economic growth,and support both residential construction acti

139、vity and demand for non-residential buildings.This is reflected in our forecasts,where building construction activity is set to outpace investment in civil engineering work over the remainder of the decade.Fender Katsalidis Architects:Queens Place,Melbourne,aims is to re-engage the site at 350 Queen

140、 Street into the Queen Victoria Market Precinct.Thesite will include two 80storey residential buildings and 5 podium levels of basement supermarket and parking.25Global Construction FuturesA global forecast for the construction industry to 2037Herzog&de Meuron Basel Architekten:1200 Bay Street is a

141、proposed 87-storey mixed-use super-skinny building rising to a height of 326.5m(1,071 ft)and is expected to be Torontos tallest buildingapart from the CN Tower which rises 553.3m(1,815 ft).26Global Construction FuturesA global forecast for the construction industry to 2037ASEAN TigersFastest growing

142、 construction markets globally in Indonesia,Philippines,and Vietnam,supported by strong fundamentals The Philippines,Vietnam,Malaysia,and Indonesia will be the four fastest growing construction markets over the next 15 years.While the Philippines,Vietnam,and Indonesia are supported by strong fundame

143、ntals,Malaysias construction growth will be driven by the rebound from the coronavirus pandemic.Labour shortages during the pandemic saw Malaysian construction activity fall over 24%in 2020,and a further 10%in 2021.A recovery in building construction activity and a large pipeline of megaprojects wil

144、l support the rebound in construction activity which should return to pre-Covid-19 levels in 2024.Thereafter Malaysian construction growth is forecast to slow back towards a more sustainable rate.The Philippines,Vietnam,Malaysia,and Indonesia will be the four fastest growing construction markets ove

145、r the next 15 years.The Philippines is set to be the fastest growing construction market over the next 15 years,averaging over 6%growth per annum.Economic growth will be supported by a strong demographic outlook,with the working age population growing by 1.5%per annum over the next decade.The govern

146、ments public-private partnership initiative and improved long-term investor confidence are set to support investmentand therefore construction activityover the forecast period.Civil infrastructure will be the fastest growing sector,with significant government support.Vietnam is set to be the second

147、fastest growing construction market over the next 15 years.Activity will be supported by strong demographic trends,but also robust foreign investment.The government has made clear its strategic intention to promote foreign investment,which in turn will support construction activity.Government projec

148、ts continue to support the outlook:Hanoi plans to build 44 million sqm of housing by 2025,while Ho Chi Minh City looks to build 108 million sqm by 2030.The government is also accelerating major transportation infrastructure projects to improve connectivity,which in turn will encourage the developmen

149、t of commercial and industrial precincts along these new routes.Indonesia is forecast to be the fourth fastest growing construction market over the next 15 years.Economic growth will be supported by a rapidly expanding middle class,who will support consumer spending,and a relatively young labour for

150、ce.The government is investing in educationas the working-age populations average years of education lags those of its regional peerswhich in turn will support growth over the longer term.Tax and labour market reforms will support private sector investment over the medium to long term.However,the Co

151、nstitutional Courts ruling on the defective process of the law creates uncertainty around the success of these reforms.Construction activity will continue to be supported by the creation of Indonesias new capital city.However,there are financing risks,as foreign investors remain apathetic to the bui

152、lding of the city.27Global Construction FuturesA global forecast for the construction industry to 2037Skidmore,Owings&Merrill:8 Shenton Way,Singapore.This mixed-use downtown development will redefine Singapores skyline as the citys tallest building and will be among Asias most sustainable skyscraper

153、s.28Global Construction FuturesA global forecast for the construction industry to 2037Western EuropeRegains position as second-largest construction market,but growth prospects to dim laterAfter a decade of lacklustre growth,Western European construction markets were resilient during the pandemic and

154、 have avoided the sharp downdraft in the housing market witnessed in North America.As a result,Western Europe this year reclaimed its historical position as the second-largest construction market after Emerging Asia,accounting for just under a fifth of total construction work done globally.The next

155、five years will be buoyed relative to the recent past by large infrastructure programmes designed to push the region to Net Zero carbon emissions(which will of course benefit Eastern Europe as well).Funds from the 800 billion EU Next Generation fund have already begun flowing,with Spain and Italy be

156、ing key beneficiaries.The Spanish market is set to lead the major Western European economies at more than 3%per annum,but challenges in project implementation in Italy will present significant headwinds.The EU Renovation Wave is a second important programme that will impact construction activity,as

157、it aims to double the renovation rate of both residential and non-residential buildings with a target of reducing their greenhouse gas emissions 60%by 2030.These large programmes will help construction work done to expand nearly 1 percentage point faster than GDP for the next five years.This growth

158、would be faster were it not for the labour market pressures in European construction.We conservatively estimate that the Renovation Wave alone will require an additional 700,000 workers by 2030,equivalent to 6%of total current construction employment.With working-age populations shrinking and many t

159、aking early retirement in the wake of the pandemic,supply-side pressures in construction will be an impediment to growth for some time.Once these programmes have run their course,the weaker fundamental drivers of construction demand will pull down the outlook in the 2030s.The working-age population

160、has already begun declining in Germany and Italy,soon to be joined by France and Spain.We expect annual growth in construction work done to decelerate to 1.5%by the early 2030sslightly above the dismal growth seen in the past decade but enough to maintain its number two spot in the global league tab

161、les.29Global Construction FuturesA global forecast for the construction industry to 2037Skidmore,Owings&Merrill:Milano-Cortina 2026 Winter Olympics.The Milano-Cortina Olympic Village leverages a singular opportunity to create a sustainable,intergenerational,and green community in the heart of Milans

162、 dynamic Porta Romana district.30Global Construction FuturesA global forecast for the construction industry to 2037Ukraine,Turkey,and Eastern EuropeHeightened growth expected from reconstruction of Ukraine,and post-earthquake rebuilding in TurkeyThe past 10 years can be fairly considered a lost deca

163、de of construction for Eastern Europe,with the volume of work done in 2022 no greater than it was in 2012.But the push for more nearshoring amid geopolitical uncertainties and pandemic-fuelled trends toward more supply chain resilience have already started to revive its fortunes.We expect the Easter

164、n European construction market to grow more than US$180 billion by 2037,a 40%increase from 2022.The non-residential segment is set to be the fastest-growing,especially industrial and commercial.Despite shrinking populations and no significant acceleration of already-high urbanisation rates,residenti

165、al work done is set to expand modestly over the next 15 years due to replacement of lower-quality housing,particularly in the multi-family segment.UkraineFunding for reconstruction of devastated infrastructure will underpin growth.One year on from Russias invasion,Ukraines economy has shrunk by abou

166、t 30%,severely hurt by the direct and indirect consequences of war and loss of territory.The liberation of half of the initially captured territory,Western financial and military support,and prompt policy response has prevented an even larger contraction.Russias invasion has resulted in massive and

167、widespread destruction of buildings and infrastructure across Ukraine.Estimates vary,but the Kyiv School of Economics estimated that Ukraine had suffered losses of over US$127 billion between 24 February and September 2022.Residential buildings bore the brunt of this damage with US$50.5 billion of d

168、amageequivalent to almost 40%of the total.These estimates pre-date the targeted attacks on civilian infrastructure and we estimate that around half of infrastructure has been damaged.This includes many thousands of kilometres of roads as well as bridges and critical energy infrastructure while a ver

169、y significant number of residential buildings have been damaged.In Mariupol,it is estimated that over 90%of residential buildings have been destroyed or badly damaged.There is not a single hospital building or medical institution in Luhansk region that has not been destroyed or severely damaged.In B

170、akhmut,in eastern Ukrainea city where 75,000 once lived and which has seen particularly fierce fightinghardly a single building remains standing,and infrastructure has been destroyed.In November 2022,EU Commission President Ursula von der Leyen stated that physical damage caused because of the invas

171、ion was estimated at EUR600 billion.Prime Minister Denys Shmyhal has also stated that the required funds to repair infrastructure would be around EUR750 billion.Reconstruction efforts in Ukraine will be extensive,and we expect growth in total construction work done to average 8.6%per annum over the

172、next five years with residential construction work done growing faster than other sectors.Growth is expected to be high over the longer-term and with shorter periods of double-digit growth.Indeed,we expect that the continuing war will mean a US$1 trillion reconstruction effort over decades.Multilate

173、ral financial organisations have stepped up to the challenge,with major commitments of resources for Ukraine.The European Investment Bank has set up a EUR100 billion fund to help with reconstruction efforts.The European Bank for Reconstruction and Development has committed EUR3 billion over 2022 to

174、2023.Interestingly,it is proposed that a digital twin of infrastructure and buildings be created for the areas of new reconstruction in Ukraine,and we expect low carbon solutions combined with rapid industrialised construction solutions to be used.External financial support will remain crucial for p

175、reserving a fragile macroeconomic stability in Ukraine.We are encouraged by joint efforts by the US,the EU,and the rest of the G7 to provide a regular inflow of around US$3 billion per monthwhich is the minimum Ukraine needs to finance its fiscal deficit.A potential full-fledged IMF programme would

176、provide a further boost to recovery.TurkeyRebuilding post-earthquakes.The tragic earthquakes in Turkey will require rebuilding.The affected areas account for nearly 10%of Turkeys GDP,and we estimate that the quakes will shave at least 0.4%from Turkeys GDP this year.But reconstruction typically more

177、than offsets these disaster-induced economic losses and are heavily concentrated in construction activity.While the timing and magnitude of this work is highly uncertain,it is a material upside risk to the outlook for Turkey.31Global Construction FuturesA global forecast for the construction industr

178、y to 2037Foster+Partners Architects:CPK Airport,Poland,will initially serve up to 40 million passengers and then expand to meet a 65 million passenger target in 2060.This pivotal project will act as a symbolic gateway to Poland.32Global Construction FuturesA global forecast for the construction indu

179、stry to 2037LATAMCatch-up from lost decade of recession and IMFdriven austerityLatin American also endured a lost decade through 2022,as Brazil endured its deepest recession in the years prior to the pandemic,and Argentina suffered through an IMF austerity programme in exchange for emergency loans t

180、o cover spiralling public debt.The result was a sharp contraction in work done across the LATAM region even before the pandemic-driven collapse.Total construction work done in the region is currently only 4%higher than it was a decade ago.Latin America endured a lost decade of growth in construction

181、 work done in the period up to 2022,but political change and a more sustainable fiscal and monetary policy will lead to a regional turnaround.But political change and more sustainable fiscal and monetary policy will lead to a regional turnaround,with total Latin American construction work done expec

182、ted to expand nearly 50%by 2037.Brazil and Argentina,which collectively account for just under 45%of the total LATAM market,will trail broader growth despite this,mainly driven by the impact of decelerating growth in working-age population and urbanisationtwo key determinants of longer-term construc

183、tion demand.Peru is set to outpace growth for the region by a considerable margin,with construction work done expected to more than double by 2037 relative to pre-pandemic levels.A key driver is the increasing importance of electricity in the global power mix.Peru is the third-largest producer of co

184、pper globally,and robust demand in the medium term will drive infrastructure growth of well above 4%annually,heavily concentrated in road transport.Bjarke Ingels Group:IQON Tower in Quito.The 32-storey building is the tallest in the Ecuadorian capital,comprising 220 apartments.A faade of cascading b

185、alconies defines IQON near La Carolina Park.33Global Construction FuturesA global forecast for the construction industry to 2037Bjarke Ingels Group:IQON Tower in Quito.The 32-storey building is the tallest in the Ecuadorian capital,comprising 220 apartments.A faade of cascading balconies defines IQO

186、N near La Carolina Park.34Global Construction FuturesA global forecast for the construction industry to 2037Saudi Arabia and MENASupersized Giga Projects drive growth and diversificationSaudi Arabia is the largest economy in the MENA region and 17th largest in the world with GDP of over US$1trillion

187、 in 2022.We expect growth in construction work done in Saudi Arabia to be the higher than the overall MENA region over the next 15 years and higher than growth in UAE.Saudi Arabia has ambitious climate goalsto ensure 50%of its energy will be generated from renewables by 2030.Population growth in Sau

188、di Arabia is also higher than many other countries and its urban population is also expected to growth at an average of 2.1%each year over the next decade.In particular,Riyadh is expected to be the fastest growing city in Saudi Arabia with growth of 2.3%in population over the next decade and we expe

189、ct it to become one of the worlds global mega cities by 2037.Government debt as a percentage of GDP is low in Saudi Arabia compared to other countries and is expected to fall over the medium term.We expect healthy public finances with oil prices remaining above US$80 a barrel over the period of our

190、forecast to 2037.Saudi Arabia plans to become carbon neutral by 2060.Despite this being 10 years later than the UN Paris Agreement,Saudi Arabia has ambitious climate goalsthe Saudi Green Initiative is a nation-wide strategy to ensure 50%of Saudi Arabias energy will be generated from renewables by 20

191、30.Total construction work done volumes in Saudi Arabia are expected to exceed that in the UAE by 65%by 2037 as construction of Saudi Arabias Giga Projects drive growth.As a means of achieving Saudi Arabias“Vision 2030”and diversification away from reliance on petro-carbons,the current pipeline of s

192、upersized Giga Projects that are planned or under construction is worth US$1 trillion.The largest project under construction is the NEOM City Project.This multi-sector project looks to see the construction of a cross-border city at a total cost of US$500 billion.The main component of NEOM is a 170km

193、 long and 200m wide development that will house up to 9 million people and will be a carbon-neutral structure.The residential construction work done sector will be the fastest growth sector over the next 15-year period with average growth over 5%per annum.The population across the wider MENA region

194、is set to grow by almost 120 million people and total construction work done will exceed US$1.1 trillion by 2037.Across the wider MENA region,total construction work done willexceed US$1.1 trillion annuallyby 2037.Cairo is the largest city in the region and is one of the worlds largest.It is expecte

195、d to grow to reach an overall population of 32.9 million by 2037 and is currently so congested that a new administrative capital was planned to help alleviate the severe congestion.Construction of the US$60 billion new administrative capital 45km east of Cairo on a desert area the size of Singapore

196、is in its seventh year of construction and will include the construction of Africas tallest skyscraper.35Global Construction FuturesA global forecast for the construction industry to 2037NEOM:NEOM is a Smart City under development in Tabuk Province in north-western Saudi Arabia.The total area of NEO

197、M is 33 times the size of New York City.NEOMs diverse climate offers both sun-soaked beaches and snow-capped mountains.Its unique location will provide residents with enhanced liveability while protecting the surrounding natural landscape.36Global Construction FuturesA global forecast for the constr

198、uction industry to 2037Monetary PolicyNormalisation of rates brings inevitable near-term headwinds for construction markets globallyClearly many factors,ranging from demographics to broader economic growth to government spending priorities,have large impacts on construction activity.But one dependab

199、le pattern lurking under these crosscurrents is that large changes in interest rates signal eventual turning points in construction activity.With interest rates at historically low levels across the developed world for most of the past decade and inflation remaining comfortably benign,policymakers a

200、nd businesses alike may have forgotten the importance of this fundamental relationship.Moving to a more normalised policy stance means inevitable near-term headwinds for construction.Depending on the trajectory of inflation and monetary tightening,the market may be in for a rude awakening.Constructi

201、on activity has already weakened in both the US and Europe as the Fed and ECB slammed the brakes on low-cost debt financing.Monetary policy errors or de-anchoring of inflation expectations could mean stickier,more entrenched inflation,which would force higher borrowing costs for longer and damage co

202、nstruction growth prospects into the medium-term.Adrian Smith+Gordon Gill Architects:160 Front Street,Toronto,Canada,has floor-to-ceiling glass and energy saving high-performance curtain walling with spectacular views of Toronto.37Global Construction FuturesA global forecast for the construction ind

203、ustry to 2037Green construction and climate changeArguably the construction industrys greatest challenge globallyClimate change is arguably the greatest challenge facing the construction industry over the next decades as the effects of climate change are evident in more frequent and severe weather e

204、vents.Planet Earth is about 1.1 degrees warmer than it was during the pre-industrial era in the late 1800s.Limiting global temperature rise to no more than 1.5 degrees is broadly accepted as the limit that would help us avoid the worst climate impacts.Based on current national climate policies,globa

205、l warming is projected to rise around 2.8 degrees from pre-industrial temperatures by the end of this century.The cost of infrastructure adaptation is expected to be huge and in practice this means examining which infrastructure should be adapted.A key issue is adapting and increasing the resilience

206、 of infrastructure and using nature-based solutionsexamples of the latter include forest regeneration as well as coastal wetland restoration and restorative agriculture.The cost of infrastructure adaptation and resilience is expected to be huge and in practice this means examining which infrastructu

207、re should be adaptedexamples include sea walls and the repurposing of existing energy infrastructure to support decarbonisation.The effects of climate catastrophes on infrastructure can be felt much further than the evident damage to infrastructure.Damaged infrastructure has the potential to paralys

208、e communities from operating without the means of communication and without electricity or safe drinking water.Fender Katsalidis Architects:Merdeka PNB118,Kuala Lumpur,Malaysia is a crystalline tower,more than 600 metres in height.The buildings 118 storeys will house purpose-built offices and a six-

209、star hotel,topped by a dual-level observation deck and restaurant.38Global Construction FuturesA global forecast for the construction industry to 2037DigitalisationTransformative for construction productivity as well as driving mass decarbonisationConstruction in many countries suffers from chronica

210、lly low or negative productivity growthrecent work undertaken by Oxford Economics for the UK Construction Productivity Taskforce shows that over the period between 1997 and 2019 the productivity of construction in the UK fell by an average of-0.6%each year.This compares to a growth in productivity o

211、f 2.8%each year over the same period for the whole economy and an increase of 3.9%for manufacturing and 8.2%for communications.Construction is one of the least digitalised industries in the world.The take-up and adoption of new technology has been incredibly sloweven below that of the agricultural s

212、ector.At its leading edge,construction has been transforming to become digital but supply chains for construction remain highly fragmented and lack transparency while the industry lacks a diverse workforce.As a result of these barriers to innovation the construction industry still remains largely an

213、alogue.Events such as the 2016 Grenfell Towers tragedy and the 2023 earthquake in Turkey and Syria will lead to much better records of what products and materials were installed in built assets and who supplied and installed them.A digital record and a“golden thread”of asset information and data dur

214、ing design and construction helps all parties to a construction project understand exactly what products and materials will go into constructing the asset.This also means that the carbon and environmental footprint of assets can be disclosed more accurately ahead of actual construction,providing the

215、 opportunity for alternative decisions to be considered.The use of data and technology to drive greater transparency and productivity is a significant opportunity for the construction industry.The development of digital twins of real infrastructure and other built assets before construction enables

216、asset owners to simulate how the infrastructure or building will operate in real life and allows construction companies and suppliers to simulate construction of the asset in a virtual world.The offsite manufacturing of components and assemblies for infrastructure and buildings is still in its relat

217、ive infancy but the take-up and greater use of Modern Methods of Construction is growing at around twice the pace of construction generally.Combining the use of greater digitalisation and offsite manufacturing into a more advanced approach called“industrialised construction”is set to improve the pro

218、ductivity of construction whilst helping to decarbonise the construction of new assets and the employment of a greater pool of global talent into construction.According to research by Pinsent Masons,countries such as UK,Australia,Singapore,and Hong Kong are market leaders in industrialised construct

219、ion.39Global Construction FuturesA global forecast for the construction industry to 2037Zaha Hadid Architects:Vilnius Railway Station,Lithuania,creates a Green Connect integrated transportation hub with new civic spaces.The renovation and upgrade of the original station incorporates a new public bri

220、dge over the railway tracks that connects the Naujininkai district to Vilnium old town.40Global Construction FuturesA global forecast for the construction industry to 2037Higher materials pricesImpact construction volumes globallyDespite easing construction supply chain pressures and cooling energy

221、prices,our forecasts suggest that building materials costs could settle at a new normal of at least 15%higher than pre-pandemic prices.We have analysed five key construction markets representingover 50%of global construction work done with projections for building material cost inflation over the ne

222、xt decade,included withinGlobal Construction Futures.Construction materials have accelerated alarmingly since the start of the Covid-19 pandemic with a combination of supply side and demand side factors coming together to create the perfect storm for the construction sector.We anticipate easing pric

223、es for construction materials across major economies through 2023 and 2024.European markets are expected to see the fastest declinespartly because energy prices have furthest to fall in these markets.Construction material prices are also forecast to fall in some Asian countries and in the US where t

224、here have already been large falls in the prices of some materials as the acceleration in the prices for construction materials began a year or so earlier than in Europe and was much more demand driven.But there is likely to be a new normal,which is at least 15%higher than pre-pandemic,as several ke

225、y cost drivers for materials settle permanently higher.Foster+Partners:270 Park Avenue will be New York Citys largest all-electric skyscraper with net zero operational emissions and will be 100%powered by renewable energy sourced from a New York State hydroelectric plant and will be JPMorgan Chase n

226、ew Global Headquarters,New York City.41Global Construction FuturesA global forecast for the construction industry to 2037Foster+Partners:270 Park Avenue will be New York Citys largest all-electric skyscraper with net zero operational emissions and will be 100%powered by renewable energy sourced from

227、 a New York State hydroelectric plant and will be JPMorgan Chase new Global Headquarters,New York City.42Global Construction FuturesA global forecast for the construction industry to 2037Why we need to decarbonise the construction value chainand how its going to be harder than it may seemPaul Sloman

228、,Partner,Engineering and Construction Sector Leader,PwC United KingdomChristopher Temple,Partner,Net Zero Transformation Leader,PwC United KingdomDaryl Walcroft,Partner,Global Engineering and Construction Sector Leader,PwC United StatesAchieving Net Zero CO2 emissions by 2050 depends on the success

229、of decarbonising the construction value chain.And with the built environment responsible for 39%of the worlds carbon emission1,and the total global floor area of buildings expected to double by 20602,we cant afford to wait.Many major economies have committed to become Net Zero by 2050,but none appea

230、rs to have a coherent plan to fully decarbonise its construction sector.By improving the energy efficiency of buildings3,we are now reducing the built environments operational carbon4(c.70%of 2019 emissions5).But theres been relatively little done to tackle the embodied carbon6(the remaining c.30%)i

231、n construction materials andprocesses.Using modern construction methods,re-using legacy buildings(instead of demolishing them),recycling more materials and products,and using“greener”materials like cross-laminated timber will all help.However,actions like this wont be nearly enough.The uncomfortable

232、 truth is that much of the embodied carbon in construction comes from the notoriously“hard to abate”7 steel and cement sectors.To achieve Net Zero in embodied carbon,this is where well have to focus our efforts.Demand for these materials will continue to grow9,and lower-carbon replacements(like cros

233、s-laminated timber)are not available at the scale we need,giving us no alternative but to find ways to decarbonise steel and cement production.Steel and cement,responsible for 7%and 7-9%8 of global emissions respectively,are the largest contributors to the construction value chains embodied carbon.A

234、drian Smith+Gordon Gill Architecture:The Imperial 3,shown as a concept design,is a 400m(1,312 ft.)116-storey supertall residential skyscraper located in South Mumbai.The Imperial 3 would be one of Indias first supertall skyscrapers to achieve a LEED Platinum rating for environmental sustainability f

235、rom Green Building Council.43Global Construction FuturesA global forecast for the construction industry to 2037How can we decarbonise the hard-to-abate steel and cement industries?We can decarbonise steel production by switching to electric arc furnace(EAF)steel,which uses scrap steel as its key inp

236、ut.But there isnt enough scrap steel available for the world to move away entirely from blast-furnace steel production.So,while we should maximise EAF steel production,we also need to improve blast furnace steelmaking by investing in hydrogen direct reduced iron(DRI)steelmaking and carbon capture,us

237、age,and storage(CCUS)10.Unlike steel,there is currently no process for making zero-carbon cement.There are alternative cementitious materials,but not in the scale required to replace the standard Portland cement process.Around 50%of CO2 emissions in cement production is a waste product from heating

238、the limestone and turning it into clinker,so the only way to decarbonise the cement industry would be to adopt CCUS solutions11 globally.The investment needed to decarbonise the steel and cement industries is vastmost likely hundreds of billions of dollars.12 And these industries rely on additional

239、investment from other sectors to develop the supporting decarbonisation infrastructure13,which is expected to cost trillions of dollars.Who is going to pay for this,particularly in todays gloomier macro-economy?Given the scale of investment needed to decarbonise the value chain,initially low-carbon

240、products will cost more than traditional ones.Consumers,developers,and investors are unlikely to willingly pay these premiums.So,there will have to be a stronger regulatory push that skews the economics in favour of low-carbon products(through grants or taxes).Without it,theres no economic incentive

241、 to reduce embodied carbon and that is inhibiting investment in decarbonisation.This is particularly true for the many low-margin firms in the construction value chain,who base investment decisions primarily on price and safety.There is a major disconnect between stakeholder incentives along the val

242、ue chain,as the person that builds the building will never live in itso their main concern is minimising cost,not maximising its sustainability.The recent US Inflation Reduction Act(IRA)14the biggest climate and energy investment in American historyoffers financial incentives to firms along the cons

243、truction value chain,at almost$400 billion15.In response,the EU is considering increasing its investment16,while the UK Government is expected to announce funding to decarbonise its steel industry17.Taxes will also help generate government income,and the EUs world-first carbon border tax18,is expect

244、ed to come into effect in 2026,if it can overcome a series of complexities.Although Europe is seen as the leader in sustainability,the recent Inflation Reduction Act will draw investment away from Europe and towards the US.What should we do next?In the short term,many organisations should look to im

245、plement“no regrets decisions”such as investing in cloud and digital capabilities to measure and monitor emissions and continuing to scale up the use of Modern Methods of Construction(MMC).Whilst many are already tracking this for scope 1 and 2,increasingly businesses need to gain a greater understan

246、ding of scope 3 emissions which,for the most part,are the biggest contributor to their emissions base.This will require collaboration across the supply chain,both upstream and downstream,to understand the entire value chain.44Global Construction FuturesA global forecast for the construction industry

247、 to 2037MMC are being deployed across the built environment,from residential to commercial,and government to healthcare.The innovations coming to the sector such as Oxyfuel cementa methodology which enables the capture of carbon in the production processcombined with the scalability of solutions suc

248、h as continued rise in use of timber frame construction in the residential sector,paint an exciting picture.Net Zero will be the biggest disruption the construction value chain has ever seen.We dont know how this will play out,but we do know,from experience,that the innovators will be at an advantag

249、e,while the laggards will face uncertainty as the pace of change accelerates closer to 2050.For economies to reach their Net Zero targets by 2050,we need urgent action and investment to reduce embodied carbon.This will mean more government support to enforce industry-wide guidance,and more collabora

250、tion between industry stakeholders to develop a connected vision and roadmap to decarbonise the construction value chain.We need to work together now to build a more productive and sustainable value chainwe cant let the perfect be the enemy of the good.1.Includes indirect emissions,e.g.,transport of

251、 building materials from suppliers to construction sites.Source:World Green Building Council2.Source:United Nations3.Through improved building design/insulation,installing sensors for demand control etc.4.Operational carbon refers to emissions associated with energy used to operate the building or i

252、n the operation of infrastructure5.2019 estimated levels,with this ratio decreasing over time as buildings become more energy efficient.E.g.,in the UK operational emissions have reduced 8%p.a.between 1990-2018 and are expected to reduce c.55%p.a.between 2025-2050.Sources:World Green Building Council

253、,The Green Construction Board6.The emissions associated with materials and construction processes throughout the whole lifecycle of a building or infrastructure7.Emissions for which the transition to Net Zero is either technologically or financially difficult8.Source:United Nations9.Demand for cemen

254、t will be driven by the construction value chain,while demand for steel will be driven by the construction value chain(c.50%of steel use),automotive industry(c.15%of use)and others.Source:Worldsteel10.Carbon Capture,Usage,and Storage(CCUS)is technology that traps and uses high concentrations of CO e

255、mitted by industrial activities11.Process emissions are those produced when limestone is heated to very high temperatures and then decomposed.CCUS is expected to account for the removal of 36%of emissions produced in the cement industry by 2050.Source:GCCA12.Source:BloombergNEF13.Infrastructure for

256、CO2/H2 transport and storage,supply of green power including the grid expansion,etc.14.Has the aim of catalysing investments in domestic manufacturing capacity,encouraging procurement of critical supplies domestically or from free-trade partners,and accelerating R&D and commercialization of leading-

257、edge technologies such as CCUS and green hydrogen15.Source:Whitehouse16.Source:European Parliament17.:BBC18.The carbon border adjustment mechanism(CBAM)requires firms in the bloc to pay tariffs on some carbon-intensive imports linked to the domestic carbon price under its Emissions Trading System(ET

258、S)45Global Construction FuturesA global forecast for the construction industry to 2037Skidmore,Owings&Merrill:Milano-Cortina 2026 Winter Olympics.The Milano-Cortina Olympic Village leverages a singular opportunity to create a sustainable,intergenerational,and green community in the heart of Milans d

259、ynamic Porta Romana district.46Global Construction FuturesA global forecast for the construction industry to 2037About PwCWe enable organisations to turn net zero obligation into economic opportunity,creating meaningful,lasting change.Our diverse,expert team delivers end-to-end net zero transformati

260、on through a powerful coupling of human ingenuity,passion and experience with technology,insights and data.With specialists in every industry and sector,and decades of decarbonisation experience,our human-led,tech-powered approach is helping organisations across the globe move their net zero plans f

261、rom ambition to action.About Oxford EconomicsOxford Economics is the worlds foremost independent economic advisory firm.Covering over 200 countries,over 100 industrial sectors and 8,000 cities and regions,we provide insights and solutions that enable clients to make intelligent and responsible busin

262、ess decisions faster in an increasingly complex and uncertain world.About Global Construction FuturesGlobal Construction Futures is a major study of the global construction and engineering industry published by the renowned team of construction economists atOxford Economics.Global Construction Futur

263、es is sponsored by the leadership team at Aon Global Construction and Infrastructure and prominent global business leaders in the construction and engineering industry with the purpose of understanding the global market and the forces shaping future demand.These sponsors combined employ over half a

264、million people across the sector and all have a significant role and position in their markets.Global Construction Futures is aimed at business leaders,policymakers,and others with a special interest in the global construction and engineering industry.Financial institutions and aspiring leaders of t

265、he future will find much of interest in Global Construction Futures.Oxford Economics separately provides a detailed dataset and forecasts of construction work done and gross construction output across 80 countries covering 10 key construction and engineering sub-sectors.Visit for further information

266、 about how to subscribe to the Global Construction Service at Oxford Economics.Who to contact about Global Construction FuturesFor clients and contacts in Australia and wider Asia Pacific Region:DrNicholas Fearnley,Head of Global Construction Forecasting,Oxford Economics,.auFor clients and contacts

267、in EMEA and Americas:Graham Robinson,GlobalInfrastructure and Construction Lead,Oxford Economics, or Jeremy Leonard,Managing Director,Global Industry Services,Oxford Economics,47Global Construction FuturesA global forecast for the construction industry to 2037MAD Architects:Hainan Science and Technology Museum in Haikou City,China Where Nature and Technology Meet includes permanent exhibition space,a planetarium,a giant screen theatre and a flying theatre.