The global construction industry has been struggling to generate growth momentum, reflecting weakness in the global economy, but prospects for 2020 are positive, says GlobalData, data and analytics company.
Danny Richards, Lead Economist at GlobalData, comments: “The pace of expansion in the global construction industry in 2019 was the slowest in a decade, standing at 2.6%. Slowdown in construction output growth has been particularly severe in advanced economies, including the US, the UK and Australia.”
“However, global construction output growth is forecast to edge up to 3.1% in 2020. Improvement in construction growth will, in part, be driven by a projected improvement in the global economy in 2020, which, in turn, relies on improvements in financial market sentiment and a stabilisation in some of the large currently-troubled emerging markets.”
Despite the positive outlook, geopolitical risks are intensifying and could potentially undermine investor confidence and disrupt capital flows in the early part of the forecast period. Risks to the overall forecast stem primarily from a possible escalation in the trade war between the US and China, and also inflamed tensions between the US and Iran.
Richards adds: “There is a risk that China could overstep its efforts to support the economy, resulting in an unmanageable debt crisis, which would disrupt investment trends globally, most notably via the impact on demand in commodities markets. There are also other major emerging markets facing domestic political and economic stresses that could erupt into full-blown crises, creating a risk of contagion across these markets.”