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The construction market size is forecast to increase by USD 1,179.2 billion at a CAGR of 5.31% between 2023 and 2028. The market is experiencing significant growth, driven by increased investment in infrastructure development and the emergence of smart cities. With a focus on sustainable and efficient building designs, the industry is embracing advanced frameworks and models to optimize planning, securing permissions, and site preparation. Raw resources remain a crucial challenge, as the industry grapples with the lack of workforce to execute excavation and foundation work, as well as framing and other critical stages of building projects. Addressing these challenges through innovation and collaboration will be essential to maintaining the momentum of the market's growth trajectory.
The construction industry is a significant contributor to the global economy, encompassing various sectors including houses, commercial buildings, infrastructure, and more. The framework of any building project begins with meticulous planning and securing necessary permissions. Site preparation is the first step, involving the acquisition of raw resources and innovative technologies to ensure efficiency and sustainability. Design plays a pivotal role in the construction process, with architects leveraging advanced modeling tools to create structures that meet the needs of various sectors such as the hospitality, retail, and leisure industries. Infrastructure projects, like roads and dams, require extensive planning and adherence to worker safety regulations and sustainability regulations.
Moreover, smart cities are a growing trend in the market, with a focus on integrating technology into buildings and infrastructure. Cold storage facilities and maintenance activities are crucial for ensuring the longevity and functionality of structures. The construction industry continues to evolve, with a focus on utilizing innovative technologies and materials to enhance efficiency, safety, and sustainability.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The buildings construction segment is estimated to witness significant growth during the forecast period. The construction industry in the United States is experiencing a resurgence following the economic downturn of 2008-2009. With approximately 80% of the population projected to reside in urban areas by 2050, the demand for new and improved infrastructure, including interior and exterior construction projects, is on the rise. This trend is particularly noticeable in rapidly expanding cities, where the need for efficient infrastructure, such as installing utilities for IT and telecommunications, is paramount. Moreover, the construction sector plays a crucial role in the development of public facilities, airport expansions, and the creation of residential and commercial complexes. For instance, the construction industry in London is heavily reliant on a diverse workforce, with EU migrants accounting for a significant portion.
However, the withdrawal of the UK from the EU has brought about challenges, including potential labor shortages, which may impact government housing targets. Additionally, the construction industry is adapting to address climate change by implementing green technologies and sustainable practices. Projects like the construction of a garden shed or a dam require a high level of precision and attention to detail, which is essential during the final inspection stages. As the industry continues to evolve, it will remain a vital contributor to the economy, providing employment opportunities and driving innovation in areas such as IT and telecommunications infrastructure.
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The buildings construction segment was valued at USD 1,532.10 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 48% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market in APAC is experiencing significant growth due to increasing construction activity in emerging countries like India, Afghanistan, and Bangladesh. This expansion is driven by the demand for new infrastructure to accommodate the growing urban population and provide residential and commercial spaces. Notably, the construction sector is witnessing substantial growth in both commercial and residential projects. For instance, the value of a road development project in APAC is estimated to be around USD7850 million. Furthermore, the Sarawak-Sabah Link Road project in Malaysia involves the construction of a 425-kilometer road connecting Sarawak and Sabah, with a projected completion date of Q4 2026.
Moreover, the other significant construction projects include installing utilities for public facilities, such as airports and dams, as well as the development of efficient infrastructure for IT and telecommunications in residential and commercial complexes. Climate change mitigation efforts are also driving the demand for green buildings and sustainable construction practices. Overall, the market in APAC is expected to continue its steady growth during the forecast period.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increased investment in infrastructure is the key driver of the market. The construction industry is experiencing a demand due to the increasing investment in building projects worldwide. Governments are allocating substantial resources towards infrastructure development, particularly in the sector of sports facilities. For instance, the 2022 FIFA World Cup in Qatar led to a significant increase in spending on constructing new stadiums and renovating existing ones. Nine new stadiums and three existing ones were planned for the event, resulting in a capital-intensive project that will likely boost infrastructure development spending in the coming decade. This trend is anticipated to drive the expansion of The market in the forecast period. The planning, securing permissions, site preparation, excavation, and foundation work stages are currently underway for many of these projects, with framing set to follow soon.
The emergence of smart cities is the upcoming trend in the market. The construction industry is witnessing significant advancements with the rise of smart city projects worldwide. These initiatives integrate technology and communication systems to manage city operations more effectively in areas such as transportation, energy efficiency, and governance. As the number of smart city building projects increases, there is a growing demand for installing advanced road safety equipment in sophisticated road network systems. This trend presents lucrative opportunities for companies in the market, as governments focus on expanding roadways to align with their smart city visions. The planning, securing permissions, site preparation, excavation, and foundation work stages of a building project are crucial in constructing a framework for these advanced infrastructure developments.
Lack of workforce in construction industry is a key challenge affecting the market growth. The construction industry in the US faces a significant challenge with the shortage of skilled labor, impacting various building projects. This labor crunch is a pressing concern for companies, as they are unable to secure sufficient skilled workforce, such as technicians, site managers, and plumbers, to execute operations. Consequently, numerous companies are forced to decline new orders due to this labor scarcity. According to industry reports, this issue is a major barrier to growth in several countries, including the US. For instance, the German Chamber of Commerce and Industry has identified the shortage of skilled labor as a significant challenge hindering industry expansion in Germany.
However, effective planning, securing necessary permissions, site preparation, excavation, and foundation work are essential initial steps in any construction project. However, the absence of a skilled workforce can significantly delay these stages and increase costs. Framing, a crucial phase in the construction process, requires specialized skills and expertise. The shortage of skilled labor in this area can lead to delays and subpar work, potentially compromising the overall quality of the building model. To mitigate this issue, industry stakeholders must collaborate to develop strategies that attract and retain skilled labor, such as training programs, competitive wages, and flexible work arrangements.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Grupoacs - The company offers infrastructure construction services for highways, railways, and residential buildings. They offer civil construction projects, building projects, and infrastructure services.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market encompasses the planning, securing permissions, site preparation, excavation, foundation work, framing, installing utilities, interior, and exterior work of various building projects. These projects range from residential houses and commercial buildings to large-scale infrastructure such as airports, dams, and public facilities. The construction industry is a significant contributor to economic development, employing architects, engineers, project managers, contractors, subcontractors, laborers, and various other professionals. Efficient infrastructure is a key focus in today's market, with climate change and sustainability regulations driving the adoption of innovative technologies and construction materials like concrete, metals, plastics, clay, stone, timber, and brick. The market caters to various sectors including residential complexes, commercial complexes, industrial properties, and civil engineering projects.
Moreover, Skanska, Vinci, and other leading players offer a wide range of product offerings in the construction industry. Activities in the market include maintenance, 3D printing, and the development of smart cities, schools, healthcare centers, tourism, retail activities, office spaces, and the hospitality sector. Infrastructure projects like roads, bridges, and cold storage facilities are also part of the market's scope. The construction industry plays a crucial role in the economy and continues to evolve with advancements in IT and telecommunications.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.31% |
Market growth 2024-2028 |
USD 1,179.2 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.94 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 48% |
Key countries |
China, India, Japan, Germany, and US |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ACS Actividades de Construccion Y Servicios SA, Al Habtoor Group LLC, BAUER AG, Bechtel Corp., Bennett Construction Ltd., China Railway Group Ltd., China State Construction Engrg. Corp. Ltd., Christiansen and Essenbaek AS, Colas SA, Eiffage, EKE Group, Etex NV, Hindustan Construction Co. Ltd, Larsen and Toubro Ltd., Lendlease Corp. Ltd., MCC Group, Shimizu Corp., Skanska AB, Vinci, and ZEPPELIN GmbH |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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