The majority of the world’s largest construction companies are based in Europe and China. In the US construction growth will tilt towards the southern states, reflecting the region’s greater catch-up potential and higher population growth. When it comes to Europe, whilst it won’t recover to reach pre-crisis levels until 2025, the UK is a stand-out growth market, overtaking Germany to become the largest in Europe and the world’s sixth largest construction market by 2030. In terms of total investment value in Infrastructure Construction, power and electricity projects are at the forefront with $5.4tr, while railways, valued at $5.2tr, account for the second-largest sector. Road projects recorded the third-largest cost share of $1.9tr, followed by airports and ports ($1.2tr) and water and sewerage ($421.5bn). The United Kingdom was the leading country in infrastructure projects in 2017-18, closely followed by Canada with an estimated 63.3 billion U.S. dollars’ worth of infrastructure projects.
- Just to keep up with our world’s basic infrastructure needs, an estimated $3.3 trillion per year will need to be spent on infrastructure through 2030
- Asia-Pacific is by far the largest region globally, accounting for almost 48% of the total global value for non-residential constructions
- China is the main driver of growth in Asia-Pacific, accounting for over 58% of its revenues
- The global non-residential construction sector to grow by 6.7% CAGR
- Projected global spending on medicines by 2023 is 1,520bn USD.
- The global residential construction sector to grow by 7.0% CAGR
Over the past six years cross-border M&A activity in Asia & the Pacific has been relatively low, averaging 24% of the total number of deals in the construction industry. The focus on internationalization to pick up in the coming years, fueled by increasing possibilities for Chinese construction companies to go abroad and the urge of South Korean and Japanese construction companies for growth markets. With the Belt and Road Initiative (BRI) focusing on infrastructure investments in Africa, more Chinese construction companies are expected to focus on overseas markets. Both Japanese and South Korean companies show a specific interest in developed markets in Europe and North America. Overseas M&A is an option for these companies, though they also focus on an equity investor role in overseas Public Private Partnerships. European and North American construction companies have been the most active buyers on the transregional construction market in 2018, when European construction companies targeted 22 transregional construction companies across the globe. By contrast, for North American buyers the 17 targets were construction companies from Europe or Asia & the Pacific.
- $69.4 Trillion of Infrastructure investment will be required up to 2035
- The public sector owns 53.3% of the projects, while 27.3% are owned by both the public and private sectors. The remaining 19.4% are privately owned
- Vonovia's acquisition of Hembla for $2.91bn. Vonovia is Germany’s largest residential property company
- Atlantia and ACS complete a 16.5b EUR acquisition of Spain’s Abertis
- Amazon joined Obvious Ventures and private investors in a larger investment of 6.7m USD in Plant PreFab
- Construction technology startup companies received $1.05bn in investment from venture capitalists (VCs) in the first half of 2018
The APAC construction market is expected to remain the largest market due to rapid growth in rising per capita income along with increasing urbanization in the region. Net migration of people from rural to urban areas, increase in consumer spending, population growth, easy mortgage rates, and increase in new housing supply are expected to drive the industry growth significantly. The worldwide desire to move to a greener future is also calling for continued efforts and renovations to old, out-dated buildings and structures. Recovering oil prices, demand for data centres, and the retail need for refurbishment in order to create a new experience to compete with the online retail world will see the construction sector go from strength to strength.
- Technology Advancements and Integration.
- Green Technology in Construction.
- Increase in Modular and prefabricated Construction Projects.
- Increasing Material Cost.
- Decreased Labor Force.
- Better Safety Equipment.
- Mobile Technology.
- Building Information Monitoring (BIM).
- Virtual Reality and Wearables.
- 3D Printing.
- Artificial Intelligence