Skip to main content
Shutterstock image, Sao Paolo, Brazil

A sustainable future

In the May 2023 issue of International Sheet Metal Review magazine, we analyse trends, drivers and challenges in global construction markets, and highlight new and emerging technologies that are making a difference….


The construction industry plays a key role for governments in developed and developing economies. The sector creates new jobs, drives economic growth and provides solutions to address social, climate and energy challenges. It has important links with other sectors, so that its impact on GDP and economic development goes well beyond the direct contribution of construction activities.

According to Reportlinker, the global construction market is forecast to grow by US$ 1123.8 billion from 2022-2027, accelerating at a CAGR of 5.3% during the forecast period. The market, it said, is driven by increased investment in infrastructure, expanding manufacturing and distribution facilities and an increasing focus on building earthquake-resilient buildings.

This study identifies the emergence of smart cities as one of the prime drivers of construction market growth during the next few years. The adoption of dry construction techniques and the development of green buildings will also lead to sizable demand in the market.

The construction market is segmented by type i.e. building construction; heavy & civil engineering; land planning and development, and specialty trade contractors. It is also segmented by end user (private and public sectors) as well as region and types of contractor.

Global market outlook

With a CAGR of 11.8 percent, analyst Beroe Inc. predicts that the market size of the global construction sector will increase from US$ 15.17 trillion in 2022 to US$ 18.96 trillion in 2024. It confirmed that, with around 40% of the market, the APAC (Asia-Pacific) region has the largest share, followed by Europe and North America.

“Countries such as the U.S. and India want to invest heavily in the construction of infrastructure and US$ one trillion has been set aside by the U.S. government for development,” it explained. “With an upsurge in residential, commercial and infrastructure projects worldwide, building activity has returned to normal. Construction materials' supply-demand dynamics are improving as a result of manufacturers' increasing production,” it added.

APAC, the largest shareholder in the construction industry, is expected to reach up to US$ 6.1 trillion with a CAGR of 4-5%. While in North America, the market is expected to grow at a CAGR of 4.8% to reach US$ 2.43 trillion in 2024.

“Globally, construction services are being severely impacted by geopolitical unrest and pressures from inflation. Since fewer investment proposals were made due to rising risks throughout the regions, demand for high-value new projects remains sluggish. Governments are concentrating on maintaining infrastructure improvement as an economic engine, which has resulted in constantly rising infrastructure investment. There are inflationary pressures on commodities that affect the construction business,” explained the analyst.

The cost of construction is based on four major components: cost of materials, cost of labour, cost of construction equipment and administrative expenses. Labour costs contribute a maximum of 35-40% of the overall cost of construction. Labour costs differ widely, depending upon the availability of skilled labour in a particular region. With rising demand from the construction and other industries in several countries in Europe, the U.S., and Australia, prices of commodities such as cement and concrete are anticipated to rise steadily.

“The shortage of truck drivers affects the logistics of raw materials for the construction industry, which is a serious threat to contractors. [There is less skilled labour available] for construction work despite the higher labour wages. Moreover, the volatile price nature of oil impacts the production and transportation of construction materials. Many countries in Europe also have a strict policy for migrant workers, and geopolitical uncertainties could further trigger price inflation,” added the analyst.

“Labour wages have increased to match the inflation rate, and raw material prices have increased due to the increase in production costs. This results in an increase in overall construction costs. Double-digit construction commodity price inflation is being seen in major regions due to global uncertainties and supply chain networks [under strain],” outlined the analyst.

Supply and demand

Major countries are providing economic stimuli and investing in creating and upgrading critical infrastructure to counter economic stagnation amid recession fears. To reduce short-term price shocks in the present market volatility, suppliers are concentrating on creating new contracts with longer project durations and larger average project tickets.

To read the rest of this article in the May issue of International Sheet Metal Review magazine, see

Add new comment

Plain text

  • No HTML tags allowed.
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.

Advertise with us