Construction Market Definition
The construction market consists of the sales revenues earned by entities (organizations, sole traders and partnerships) that construct buildings or engineering projects (for example, highways and utility systems). Establishments that prepare sites for new construction and those that subdivide land for sale as building sites are included in this market. The construction market includes new work, additions, alterations, maintenance, and repairs
The market covered in this report includes the sales of construction services, new construction, remodeling, or renovating existing residential structures, maintenance and repairs, construction of temporary buildings, on-site assembly of precut, panelized, and prefabricated buildings, construction of distribution lines and related buildings and structures for utilities, installation of specialized building equipment such as elevators, escalators, and service station equipment
Construction Market Size
The global construction market reached a value of nearly $12,744.4 billion in 2019, having increased at a compound annual growth rate (CAGR) of 6.1% since 2015. The market is expected to decline from $12,744.4 billion in 2019 to $12,633.9 billion in 2020 at a growth rate of -0.9%. The growth decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 7.5% from 2021 ad reach $15,482.0 billion in 2023.
Growth in the historic period resulted from strong economic growth in emerging markets, low interest rates in most developed countries, increasing the demand for elderly friendly infrastructure and technological development. Factors that negatively affected growth in the historic period were geo-political tensions, and rising material costs.
Going forward, increasing growth in investments in renewable power generation capacities and Urbanization will drive the growth. Factors that could hinder the growth of the construction market in the future include outbreak of coronavirus disease (COVID-19) and health and safety measures.
Construction Market Drivers
The key drivers of the construction market include:
Rising Investments In Renewable Energy Infrastructure – Rapid growth in investments in renewable power generation capacities is expected to drive the construction market in the forecast period. A large number of power generation companies are investing in renewable energy sources, especially in the USA and European countries. For instance, in December 2017, EDF Energy announced an investment of more than €25 billion in solar power infrastructure. Further, governments globally are also promoting renewable energy sources by offering incentives and subsidies to renewable power generation companies. The Australian government offered $600 million in subsidies to wind power generators. This is expected to boost the demand for services provided by construction companies, thereby driving the market during the forecast period.
Construction Market Restraints
The key restraints on the construction market include:
Health And Safety Measures – Health and safety issues have always been a major concern in the construction industry. Tasks of construction workers involve working at heights, working in confined spaces, working underground and in close proximity to falling materials, handling load manually, handling hazardous substances and exposure to live electric cables. The American construction industry comprises just 6% of the US workers, but witnesses around 20% the fatalities accounting for the largest number of fatalities compared to any other industry. Safety and health hazards have a negative impact on the construction industry acting as a restraint on the market.
Construction Market Trends
Major trends influencing the construction market include:
Use Of Autonomous Construction Vehicles
Construction companies are increasingly using autonomous construction vehicles and heavy equipment to improve productivity. These automated vehicles are equipped with sensors, cameras and GPS. Real-time data obtained from these devices helps in remote monitoring of a jobsite and reduces construction time. Vehicles connected through IoT, telematics and RFID tracking technologies are also helping the construction industry to be more collaborative, efficient and safe. Leading manufacturers such as Komatsu, Caterpillar and Volvo CE are continuously releasing new models of autonomous, semi-autonomous and remote-controlled excavators and other heavy equipment. Royal Truck & Equipment is pilot testing with Florida DOT for self-driving trucks for work zones.
Digital Technologies Are Improving Construction Safety
Construction companies are adopting digital technologies such as augmented reality (AR), virtual reality (VR) and wearables to improve construction site safety. VR and AR enable construction managers to view jobsite conditions in a simulated environment. They can also be used for training workers on safe operation of heavy equipment in a controlled environment. Wearables can track workers in the field to protect them from jobsite hazards and other potential injuries. New safety devices such as carbon monoxide-detecting hats use noninvasive blood oxygen monitors to alert workers in areas with high carbon monoxide emissions. Skanska USA, a leading construction group, is using equipment sensors and labor tracking technology to ensure safety of workers. In 2016, Bechtel, a US-based construction and civil engineering company, started VR immersion safety training for its workers. New South Construction Company in Atlanta is using Oculus Rift VR headsets for project imaging and worker safety.
Opportunities And Recommendations In The Construction Market
Opportunities – The top opportunities in the construction market segmented by type, will arise in the buildings construction market segment, which will gain $1,637.1 billion of global annual sales by 2023. The top opportunities in the buildings construction market segmented by type will arise in the residential building construction market segment, which will gain $1,011.5 billion of global annual sales by 2023. The top opportunities in the heavy and civil engineering construction market segmented by type will arise in the highway, street, and bridge construction market segment, which will gain $130.0 billion of global annual sales by 2023. The top opportunities in the specialty trade contractors market segmented by type, will arise in the building equipment contractors segment, which will gain $287.9 billion of global annual sales by 2023. The top opportunities in the land planning and development market segmented by type will arise in the residential land planning and development market segment, which will gain $36.9 billion of global annual sales by 2023. The construction market size will gain the most in China at $ 663.9 billion.
Recommendations – To take advantage of these opportunities, The Business Research Company recommends the Market-trend-based strategies for the construction market include using autonomous construction vehicles, adopting green construction techniques, using digital technologies to improve construction safety, and using advanced building materials. Player-adopted strategies in the construction industry include investing in green building projects, and expanding businesses through strategic partnerships and acquisitions, among other strategies.
Construction Market Segmentation
The Construction market is segmented by type, by end-user sector and by geography.
By Construction Type -
The construction market can be segmented by type of
- a) Buildings Construction
- b) Heavy And Civil Engineering Construction
- c) Specialty Trade Contractors
- d) Land Planning And Development
The buildings construction market was the largest segment of the construction market segmented by type, accounting for 51.7% of the total in 2019. Going forward, the land planning and development segment is expected to be the fastest growing segment in the construction market, at a CAGR of 8.6% during 2019-2023.
Sub-Segmentation
By Type-
The buildings construction market is further segmented by type of
- a) Residential Building Construction
- b) Nonresidential Building Construction
The residential building construction market was the largest segment of the buildings construction market segmented by type, accounting for 58.2% of the total in 2019 and going forward, this segment is expected to be the fastest growing segment in the buildings construction market, at a CAGR of 6.0% during 2019-2023.
The heavy and civil engineering construction market is further segmented type of
- a) Utility System Construction
- b) Highway, Street, And Bridge Construction
- c) Other Heavy And Civil Engineering Construction
The utility system construction market was the largest segment of the heavy and civil engineering construction market segmented by type, accounting for 43.9% of the total in 2019. Going forward, the highway, street, and bridge construction segment is expected to be the fastest growing segment in the heavy and civil engineering construction market, at a CAGR of 4.9% during 2019-2023.
The specialty trade contractors market is further segmented by type of
- a) Building Equipment Contractors
- b) Building Finishing Contractors
- c) Foundation, Structure, And Building Exterior Contractors
- d) Other Specialty Trade Contractors
The building equipment contractors market was the largest segment of the specialty trade contractors market segmented by type, accounting for 44.3% of the total in 2019. Going forward, the building finishing contractors segment is expected to be the fastest growing segment in the specialty trade contractors market, at a CAGR of 4.8% during 2019-2023.
The land planning and development market is further segmented by type of
- a) Residential Land Planning And Development
- b) Commercial And Institutional Land Planning And Development
- c) Industrial Land Planning And Development
The residential land planning and development market was the largest segment of the land planning and development market segmented by type, accounting for 77.9% of the total in 2019 and going forward, this segment is expected to be the fastest growing segment in the land planning and development market, at a CAGR of 8.8% during 2019-2023.
By End-User Sector -
The construction market can be segmented by end-user sector into
The private end-user market was the largest segment of the end-user sector segmented by type, accounting for 54.4% of the total in 2019. Going forward, the public end-user segment is expected to be the fastest growing segment in the end-user sector market, at a CAGR of 5.7% during 2019-2023.
By Geography- The construction market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- Denmark
- Switzerland
- Ireland
- Sweden
- Netherlands
- Austria
- Belgium
- Portugal
- Norway
- Finland
- o Asia Pacific
- China
- Japan
- India
- Australia
- Philippines
- Vietnam
- Indonesia
- Malaysia
- New Zealand
- Hong Kong
- Singapore
- South Korea
- Thailand
- o Eastern Europe
- Poland
- Russia
- Romania
- Czech Republic
- o South America
- Peru
- Argentina
- Chile
- Brazil
- Colombia
- Venezuela
- o Middle East
- Saudi Arabia
- UAE
- Turkey
- Israel
- o Africa
- Nigeria
- Egypt
- South Africa
Asia Pacific was the largest region in the global construction market, accounting for 41.0% of the total in 2019. It was followed by North America, Western Europe, and then the other regions. Going forward, the fastest-growing regions in the construction market will be Middle East, and Asia Pacific.
Construction Competitive Landscape
Major Competitors are:
- • China State Construction Engineering Co., Ltd.
- • China Railway Group Ltd.
- • China Railway Construction Corporation Limited
- • China Communications Construction Group Ltd.
- • Vinci S.A.
Other Competitors Include:
- • Power Construction Corp. Of China
- • Grupo ACS
- • Bouygues S.A.
- • Bechtel Corporation
- • Lennar Corporation
- • CIMIC Group, China State Construction Engineering Corp. Ltd.
- • Shimizu Corporation
- • Lendlease Group
- • CapitaLand Limited
- • Hindustan Construction Company
- • Shanghai Construction Group Co. Ltd.
- • Shaanxi Construction Engineering Group Corp. Ltd.
- • Hunan Construction Engineering Group Corp.
- • DLF, Tata Projects
- • Punj Lioyd
- • Larsen & Toubro
- • Reliance Infrastructure Limited
- • JGC Corporation
- • Obayashi Corporation
- • Takenaka Corporation
- • Kajima Corporation
- • Zeppelin GmbH
- • SGS
- • Interconstruct
- • Etex
- • Anker Hansen & Co. A/S
- • Christiansen & Essenbæk A/S
- • C.C. Contractor A/S
- • EKE-Construction Ltd.
- • Colas Group
- • Eiffage Construction
- • Bauer Group
- • Bennett Construction Limited
- • Collen Construction Limited
- • Casais Group
- • Balfour Beatty
- • Carillion
- • Laing O’ Rourke
- • Interserve
- • Morgan Sindall
- • Kier
- • Galliford Try
- • ESTA Construction
- • Etalon Group
- • Glavstroy
- • Stroygazmontazh
- • Denezam
- • DG Construction
- • Construction Group International
- • GERC
- • Perry Construction
- • CTR Group a.s.
- • Babis Vovos International Construction
- • Berios
- • Consolidated Contractors Group
- • Fluor Corporation
- • Kiewit
- • Ledcor Group of Companies
- • EllisDon Inc.
- • Aecon Group
- • Oderbrecht
- • Camargo Corrêa
- • Andrade Gutierrez
- • Queiroz Galvão
- • MRV Engenharia
- • SalfaCorp
- • Mourik General Contractors
- • Gilbane Building Company
- • McCrory Construction Company
- • Al Habtoor Group LLC
- • Al-Naboodah Constructing
- • Arabian Construction Company
- • Julius Berger Nigeria Plc.
- • Reynolds Construction Company
- • Thabimndeni Construction & Projects CC
- • Orascom Contstruction
- • Lubrik Construction Company
