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Global Construction Industry


The global construction industry is expected to be worth over $3 trillion in 2015, increasing over 30% in a five-year period, according to MarketLine. The industry is involved in the construction of various structures, including housing, factories, schools, bridges and roads. Apart from constructing new buildings and structures, the industry also encompasses setting up new sites, repair, maintenance and modification of existing structures.


Most contractors are specialized in one kind of construction, for example commercial or residential buildings. Apart from work carried out by the team contracted to do a specific job, contractors also subcontract parts of the job to external crews such as specialty trade contractors, who do specific jobs such as carpentry, heating or painting. The general contractor remains solely responsible for the job.


General infrastructure projects fall under the remit of civil engineers and heavy construction contractors. This sector includes the construction of structures such as bridges, sewers, roads and tunnels as well as all services created around the industry.


Key Market Segments


Building Materials: The world aluminum industry will be worth just under $100 billion in 2011, according to research from Visiongain. Recycling will have a role to play in changes to the industry moving forward, both in residential and non-residential construction. The industry will see dynamic growth in developing countries where industrialization will mean many major construction projects.


Construction Equipment: Though slowed by the economic downturn, the global market for escalators and elevators is beginning to rebound. The leading four companies, according to Koncept Analytics, hold the lion’s share of the market. Demand for escalator and elevators is strongest in the EU, representing almost 50% of the overall installed base of these structures. China represents the fastest-growing market segment for new installations. Future market growth will be fuelled by general worldwide construction activity.


Home Building & Improvement: Global demand for windows and doors is expected to expand at 7% yearly through 2015, according to Freedonia, for an overall worth of $200 billion. China is the world’s leading market, expected to grow 2% to almost 30% of the overall market segment in 2015. Economic developing and bigger housing units will fuel demand. The US will see high growth of 9% yearly through 2015. Plastic windows and doors will constitute the most dynamic market sub segment in terms of growth, though plastic doors will not breach the 10% marker of overall door demand. Vinyl windows will see increased demand thanks to their longevity, low cost, energy efficiency and low maintenance.


US Window & Door Demand, *In US$ Bn



Leading Regional Markets


Building construction is an important employer (with high employment rate in sectors such as civil engineering), with over 2.5 million people employed in general and specialty trade outside of residential structures in 2010, or just under 50% of overall construction jobs, according to the Associated General Contractors of America. The industry employs 5.5 million people overall. Non-residential construction represented over $285 billion in the same year, while non-building construction neared $270 billion and residential buildings reached almost $250 billion. MarketLine research showed that the Asia-Pacific region represents over 25% of the world construction and engineering industry in terms of market worth.



Market Outlook


The global economic recession took a strong toll on the construction industry, mainly due to the reliance of new housing construction on a favorable economic climate. The industry also suffers a knock-on effect from other industries, for example a drop in retailers’ profit makes them less likely to invest in new building. Government spending on buildings, such as schools and infrastructure, is also cut during times of economic downturn, having a direct effect on the construction industry.


Higher energy costs are inversely having a positive impact on the construction industry as buildings are renovated or rebuilt to be more energy efficient. Moving forward, the demand for more buildings and construction processes with less harmful effects on the environment will continue rising. Recyclable materials will be increasingly used.



Leading Industry Associations


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