Construction Market Analysis APAC, Europe, North America, Middle East and Africa, South America - US, China, Japan, India, Germany - Size and Forecast 2023-2027

Construction Market Forecast 2023-2027

The construction market is estimated to grow by USD 1,123.8 billion at a CAGR of 5.3% between 2022 and 2027. The market growth is dependent upon various factors, notably heightened investment in infrastructure, expanded manufacturing and distribution facilities, and a growing emphasis on constructing earthquake-resilient buildings. Increased infrastructure investment propels construction activities, fostering demand for building materials and related services. Simultaneously, the expansion of manufacturing and distribution facilities indicates robust industrial growth, driving demand for commercial real estate and construction services. Furthermore, the focus on earthquake-resilient buildings underscores the importance of sustainable and resilient infrastructure development, particularly in regions prone to seismic activity. Together, these factors drive the upward trajectory of the market.

Overview of the Construction Market

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Market Dynamics and Customer Landscape

The Construction Market encompasses a vast array of activities and sectors, from commercial construction to residential projects. It involves the intricate framework and model development, utilization of raw resources, and meticulous planning for every building project. Vital steps such as securing permissions and site preparation lay the foundation for the construction process. This market caters to various needs, including the construction of houses, roads, and dams, as well as ongoing maintenance efforts. Skilled professionals such as architects and engineers play pivotal roles in bringing projects to fruition. With a focus on innovation, the construction industry integrates innovative technologies to enhance efficiency and sustainability across sectors including the hospitality sector, retail sector, leisure sector, and healthcare sector.

Key Market Driver

Increasing infrastructure investment is a key factor in the growth of the market. Governments around the world invest significantly in the development of sports infrastructure and facilities. The construction sector is experiencing a surge in demand due to substantial investment in infrastructure projects worldwide. For instance, the U.S. and China have allocated vast resources towards commercial and residential development, as well as renovation projects. Instances of significant investment include the USD 13.1 billion spent on Beijing International Airport in China and the USD 22 billion spent on Qatar's 2022 FIFA World Cup stadiums. Architecture, engineering, and materials companies stand to benefit from this trend, as opportunities for innovation, technology integration, and sustainability initiatives abound. The construction market's value is expected to rise, driven by increasing labor and cost analysis in the sector. Overall, the construction sector presents numerous opportunities for growth and development in the coming decade.
These investments in the industry are anticipated to augment the growth of the market. Furthermore, an expense of USD 8.8 billion over six years to strengthen the capacities of primary, secondary, and tertiary care and healthcare systems was allocated. These actions taken by governments to improve the infrastructure are expected to drive the market.

Significant Market Trends

The emergence of smart cities is an important growth trend in the market. Smart cities involve the integration of information and communication and the adoption of the latest technologies to effectively manage city operations. In specific instances, the U.S. construction market encompasses both commercial and residential sectors, with a focus on renovation projects driven by the integration of advanced architecture and engineering in smart city initiatives. These projects necessitate significant investment in innovative materials and technology, leading to a rise in value within the construction sector. Sustainability is a key consideration, with an emphasis on energy efficiency and labor cost reduction through technology adoption. Market analysis indicates a steady increase in opportunities for vendors in this sector, particularly in the areas of infrastructure development and road safety equipment installation for advanced road network systems. The construction markets continue to expand, offering substantial returns for those who invest wisely in this dynamic industry.

The Association of Southeast Asian Nations (ASEAN) has created a collaborative platform for strengthening the vision of smart city projects. The ASEAN Smart City Network (ASCN) has estimated that by 2030, ASEAN growth will be driven by urban cities with 90 million more people to urbanize, and nearly 35%-40% of the regional growth to be derived from such initiatives. Efficient waste management, smart streetlights, smart highways, parking sensors, and improved security are a few of the major objectives of the smart city initiative. Thus, the increase in the number of smart cities across the world is anticipated to drive market trends during the forecast period.

Market Market Challenges

The lack of work in the construction industry is a major challenge to the market. The problem of limited skilled labor is most important in several regions such as APAC, Europe, and South America. In the construction sector, both in the U.S. and internationally, there is a notable instance of a labor shortage, particularly for skilled workers such as technicians, site managers, and plumbers. This shortage is impeding the growth of industries, including construction, in markets like Germany. The demand for construction materials, be it for commercial, residential, or renovation projects, remains high. Architecture and engineering firms, as well as investors, continue to seek opportunities for innovation, technology, sustainability, and value in the construction markets. However, the rising cost of labor is a significant challenge for the sector construction. A comprehensive analysis of the construction markets reveals that the sector's growth is being hindered by the labor shortage, which in turn affects the overall value proposition of construction projects.

However, uncertainties regarding the inclusion of migrants have slowed down companies’ pace in recruiting them. This is more common among small and medium-sized enterprises (SMEs) that have to wait for final regulatory approvals regarding the entry of migrants. Such factors are expected to hinder market during the forecast period.

Customer Landscape

The market trends and analysis 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 market growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Key Players in the Industry

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 forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• 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.
• MCC
• Shimizu Corp.

Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Market Segmentation

This market encompasses a vast array of activities, from building structures to renovating existing ones across various sectors of the economy. It plays a pivotal role in shaping our cities and communities, driving growth, and facilitating development. With advancements in design, architecture, and construction technology, the industry is experiencing a wave of innovation. From residential housing to commercial buildings, businesses rely on the construction sector to provide the infrastructure needed to thrive. This demand drives the market for construction materials, equipment, and services.Market analysis and reports provide valuable insights into trends, costs, and opportunities within the construction sector. These reports inform decision-making processes, enabling businesses to stay ahead in a dynamic and competitive environment.As the construction market continues to evolve, there is a growing emphasis on sustainability, efficiency, and cost-effectiveness in construction projects. This focus on innovation and optimization ensures that the construction industry remains a key driver of economic growth and development.

By Type

The market share growth by the building construction segment will be significant during the forecast period. This segment has rebounded after the global economic crisis of 2008-2009 and is showing signs of good growth. Rising urbanization rate around 80% of the population will be concentrated in urban areas by 2050. The increasing pressure on the fastest-growing cities has resulted in increased buildings construction. The increased spending on these activities is likely to be the key driver of this industry.

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This segment was valued at USD 1,461.72 billion in 2017 and continued to grow by 2021. The construction sector in the U.S. and globally has experienced a resurgence since the economic downturn of 2008-2009. Instances of this growth can be seen in the commercial and residential markets, particularly in urban areas where population concentration is projected to reach 80% by 2050. This pressure on cities has led to increased spending on construction activities, presenting opportunities for investment in materials, architecture, engineering, and renovation. Innovation and technology are key drivers in the sector, with a focus on sustainability and cost analysis.

The construction markets continue to rise in value, offering significant opportunities for growth in both commercial and residential sectors. However, challenges such as labor availability and cost remain critical factors in market analysis. The sector's continued expansion is expected to bring about further advancements in construction technologies and practices. Developing nations such as India, China, and South Africa, which are witnessing a trend of urbanization, are expected to drive the demand for the buildings construction segment during the forecast period. Therefore, owing to these factors, the market is expected to witness growth during the forecast period.

By End-User

The construction industry is experiencing significant growth, with the construction market size increasing due to population growth and urbanization. The sector is witnessing a surge in demand for new residential units, particularly in APAC and the Americas. Manufacturing and infrastructure projects are also driving market expansion. The market is anticipated to develop at a rapid pace, with an increase in housing projects, especially single-family homes. Approximately 38 million new housing units will be constructed in APAC, accounting for over 60% of the global new housing units. Factors such as government spending, economic development, and design trends are influencing the construction industry's growth. Key regions, including India and Germany, are witnessing a boom in construction activities, with businesses and companies investing in new projects and utilizing construction equipment. Urbanization, population growth, and infrastructure development are the primary drivers of this trend.

Regional Analysis

APAC is estimated to contribute 50% 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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Growing construction activity in emerging countries such as India, Afghanistan, and Bangladesh attributes to the growth of the market in APAC. The construction industry in the APAC region is experiencing significant growth, driven by increasing demand for residential and commercial structures in emerging countries like India, Afghanistan, and Bangladesh. The construction market size is projected to expand steadily, fueled by government spending on infrastructure projects. In 2020, India allocated USD 8.58 billion for the Odisha Economic Corridor Project, which includes the development of industrial clusters and housing areas.

Manufacturing and service sectors are key contributors to this trend. Factors such as urban population growth, economic development, and design innovations continue to influence the construction market in the world's dynamic regions. Contractors and businesses in the construction sector are capitalizing on these trends to build modern, sustainable structures that meet the needs of people and businesses in APAC. Germany is another region witnessing growth in the construction market, particularly in the industrial and housing segments.On the other hand, emerging economies are experiencing huge growth in both commercial and residential construction.

Market Analyst Overview

In the industry, marketing plays a crucial role in securing projects and expanding business. Constructions involve a significant investment, and marketing strategies are essential to reach potential clients and stakeholders. The construction market is competitive, with numerous contractors vying for projects. Marketers must employ effective strategies to differentiate their services and build a strong brand. Construction marketing includes various tactics, such as social media marketing, content marketing, and search engine optimization (SEO). These methods help increase online visibility and attract leads. Additionally, traditional marketing techniques like print ads, billboards, and direct mail can still be effective in reaching local audiences. Moreover, industry events, partnerships, and collaborations are essential for networking and building relationships in the construction sector. Marketers must also stay updated on industry trends, regulations, and technologies to provide valuable insights to clients and maintain a competitive edge. In conclusion, construction marketing is a multifaceted approach that requires a deep understanding of the industry and effective communication strategies. By utilizing various marketing tactics and staying informed, construction businesses can attract leads, build strong relationships, and ultimately grow their business.

 

The market encompasses a diverse range of stakeholders and sectors, from project managers and subcontractors to laborers and suppliers. It spans various domains including commercial and industrial construction, with a focus on developing office spaces, schools, healthcare centers, tourism facilities, and retail establishments. Emerging technologies like 3D printing are revolutionizing traditional construction methods, while sustainability regulations drive the adoption of innovative materials and practices. From traditional materials like clay, stone, timber, brick, concrete, and metals to modern solutions incorporating plastics, construction projects encompass a wide array of structures including bridges and cold storage facilities. Worker safety regulations play a crucial role in ensuring workplace safety across the commercial and residential sectors, as well as in the hospitality, leisure, and healthcare industries.

Segment Overview

The market growth and forecasting report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Type Outlook
  • Buildings construction
  • Heavy & civil engineering
  • Land planning and development
  • Specialty trade contractors

• End-user Outlook
  • Private sector
  • Public sector

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Scope
Market Report Coverage	Details
Page number	158
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.3%
Market growth 2023-2027	USD 1,123.8 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	4.78
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 50%
Key countries	US, China, Japan, India, and Germany
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	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., MCC, Shimizu Corp., Skanska AB, Vinci SA, ZEPPELIN GmbH, and Lendlease Corp.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period.
Customization purview	If our market research and growth 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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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, Europe, North America, Middle East and Africa, and South America
• Thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of market vendors

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