Blog | 18 May 2023

China, US, and India – The top three countries will add almost US$2.4 trillion to global growth in construction work done over the next 15 years

Economic Consulting Team

Oxford Economics

construction site

Global construction work done will grow over US$4.2 trillion over the next 15 years—from US$9.7 trillion in 2022 to US$13.9 trillion by 2037, we find that in our Global Construction Futures report produced in partnership with Aon and other industry leaders.

China, the US, and India will account for 51% of all construction work done by 2037—underpinning the future economic development of the three countries that account for over a third of the world’s population and economic output.

US activity to be supported by the Inflation Reduction Act and infrastructure spending

Residential construction activity in the US is set to undergo a significant slump, as higher interest rates and construction costs weigh over the near-term outlook. The Inflation Reduction Act is supporting significant manufacturing activity and clean energy as a part of the US efforts towards a green transition while the Bipartisan Infrastructure Bill will support civil engineering work, with significant funding flowing to the power and utilities sector, as well as road and highway construction. Debt levels, however, will constrain the ability of the US to fund infrastructure projects in the longer-term.

China construction growth to slow but remains strong

We expect growth in construction work done in China to slow over the next 15 years as the economy transitions from an infrastructure-led growth model to a consumption-led one. A shrinking and aging population will make this transition more challenging, as a diminished labour force and elevated saving rate hamper consumption growth. We nevertheless expect residential construction activity to exceed US$500bn over the next 15 years, supported by the ongoing trend towards urbanisation and government backed rental housing construction activity.  

The slowdown in China will see India become the fastest growing construction superpower over the next 15 years, with average annual growth 3 times higher than the US. Despite the slowdown in China, we expect Chinese construction activity will continue to grow faster than the global average, and thereby exceed the US by a significant margin over the next 15years.

India becomes a global construction powerhouse

Growth over the next 15 years in India alone is expected to 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 its 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.

Behind our global growth forecasts are the other key trends which we set out and monitor in our Global Construction Service. The service provides comprehensive analysis and quarterly forecast updates for 70 national construction markets, accounting for over 90% of global activity. It also includes detailed forecasts of both new construction and renovations across 19 European countries.

Learn more about the future of construction by downloading the Executive Summary of Global Construction Futures report.

Authors

Nicholas Fearnley

Head of Global Construction Forecasting, OE Australia

+61 2 8458 4262

Nicholas Fearnley

Head of Global Construction Forecasting, OE Australia

Sydney, Australia

Dr Nicholas Fearnley is the Head of Global Construction Forecasting, based in Sydney. Nicholas oversees 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 mining industries.

Nicholas joined Oxford Economics in 2019 after working at Macromontor, where he was responsible for producing regular Australian building construction forecast reports, and bespoke cost escalation and material demand forecasts.

Prior to joining Macromonitor, Nicholas completed a PhD at the University of Sydney with a thesis titled: “A Critical and Quantitative Analysis of the Relationship between Informal Institutions and Economic Development.” He was awarded the Walter Noel Gillies Prize for best PhD thesis in Economics, and his thesis was accepted without edits.

Nicholas has undergraduate degrees in both Accounting and Applied Finance from Macquarie University, and a first class honours degree in Accounting from the University of Sydney with a thesis titled: “Culture and the Measurement Decision Offered by Investment Property”.

Graham Robinson
Graham Robinson

Global Infrastructure and Construction Lead

+44 (0) 784 305 6580

Graham Robinson

Graham Robinson

Global Infrastructure and Construction Lead

London, United Kingdom

Graham is the Global Infrastructure and Construction Lead at Oxford Economics.

He is also the Global Business Consultant at Pinsent Masons LLP – the world’s top-ranked firm of lawyers for construction. He has 35 years of experience in the infrastructure and construction sector.

He is one of the world’s leading global construction economists, according to Engineering News Record (ENR) in the US. He leads consultancy assignments and is an author of Global Construction 2030 and many other industry reports and writes regularly for journals and other media.

Graham was previously a Partner and Head of Management Consulting for one of the largest global management and construction consultants and he was Commercial Director of the renowned Centre for Strategic Studies in Construction as a part of the School of Construction Management and Engineering at the University of Reading – a recognised global centre of excellence in construction strategy.

Jeremy Leonard

Managing Director of Global Industry Services

+44 (0) 207 910 8032

Jeremy Leonard

Managing Director of Global Industry Services

London, United Kingdom

Jeremy Leonard is responsible for overseeing the work of the industry forecasting team and managing the operation and output of Oxford Economics’ Global Industry Model as well as related consultancy work.

Jeremy’s knowledge and past experience span a broad range, including competitiveness and offshoring/reshoring, commodity price modelling, and applied economic research on sectors ranging from biotech to heavy manufacturing to telecoms. In addition to numerous recurring bespoke sales and output forecasts for industries as diverse as machine tools and consumer packaging, recent consulting assignments have included the drivers of competitiveness in the chemical sector, forward-looking analyses of high-growth sectors across a range of emerging economies, and the ways in which digital technologies are transforming economic activity across manufacturing and service sectors.

Prior to joining Oxford Economics, Jeremy ran his own consulting firm based in Montreal, Canada providing a variety of economic analysis and forecasting services related to commodity prices, competitiveness, and the Canadian and US economic outlooks for the Washington, DC-based Manufacturers Alliance for Productivity and Innovation, as well as serving as economic research director for the Montreal-based Institute for Research on Public Policy.

Born and raised in Washington, DC, Jeremy was educated at the University of Pennsylvania and McGill University, where he received his MA in Economics summa cum laude. He also speaks fluent French.

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