Construction Market Definition
The construction industry includes architectural services, the physical processes of building, infrastructure development, civil engineering, the assembly and installation of prefabricated components and equipment, and repairs and maintenance for already built structures.
Construction Market Drivers
The Key drivers of the construction market include:
Low Interest Rate Environment – During the period 2013 to 2017 interest rates in most developed countries were very low. This created a flow of cheap money for investment, both in developed and developing economies. It also encouraged borrowing and discouraged saving in advanced markets, helping to drive spending. Markets such as this one benefited from the flow of cheap money during this period. Low interest rates increased house sales and non-residential construction such as office development. Construction companies were able to meet this rise in demand by borrowing money at low investment rates and accelerating their project activities.
Construction Market Restraints
The key restraints on the construction market include:
Decrease In Productivity – The productivity in the construction industry has been declining over the two decades and this can be attributed to the industry becoming less capital-intensive and lesser consolidation among industry players. Profit margins in the construction industry are getting thinner, thus making investments even less likely. Workers are replacing machinery, and subcontractors are looking to maximize profit rather than collaborate to contain costs. Cheap labor and high costs of technology are also slowing growth. The construction industry is fragmented and highly cyclical in nature. According to a research done at Oxford University, more than 90% of world’s infrastructure projects are either delayed or over-budget. American builders’ productivity has plunged by half since the late 1960s. In the past 20 years, Germany and Japan have seen negligible growth in construction productivity. In France and Italy, the productivity has fallen by one-sixth.
Construction Market Trends
Major trends influencing the construction market include:
Green Construction Projects - Building construction companies are increasingly using green construction techniques to build energy efficient buildings and reduce construction costs. Green construction refers to the practice of using sustainable building materials and construction processes to create energy-efficient buildings with minimal environmental impact. According to World Green Building Trends Survey 2015, about 51% of construction firms in the UK were involved in green construction projects. Certifications such as Leadership in Energy and Environmental Design (LEED) help construction companies to develop high-performance, sustainable residential and commercial buildings, and also offer a variety of benefits, from tax deductions to marketing opportunities. Sustainable construction materials such as natural paints and steel beams made from recycled material are being widely used in the UK. Other green construction techniques such as cross-ventilation for more natural environment, green construction software such as Construction Suite to ensure green compliance, and Green Globes management tool are also being used in the construction industry.
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 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 crash trucks for work zones.
Construction Market Segmentation
The construction market is segmented by type, and by geography.
By Service Type-
The construction market is segmented by type into
- a) Building Construction
- b) Heavy and Civil Engineering Construction
- c) Specialty Construction Contractors
- d) Land Planning And Development
Building Construction market is further segmented into Residential Building Construction, and Non-Residential Building Construction.
Heavy and Civil Engineering Construction market is further segmented into Utility System Construction, Highway, Street, And Bridge Construction, and Other Heavy And Civil Engineering Construction.
Specialty Construction Contractors market is further segmented into Building Equipment Contractors, Building Finishing Contractors, Foundation, Structure, And Building Exterior Contractors, and Other Specialty Construction Contractors.
Land Planning And Development market is further segmented into Residential Land, Commercial And Institutional Land, and Industrial Land.
Building Construction had the highest growth rate of 8.1% during the historic period.
By Geography-The Construction Market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- o Asia Pacific
- China
- Japan
- India
- Australia
- o Eastern Europe
- o South America
- o Middle East
- o Africa
Asia-Pacific is the largest market for construction, accounting for 60.1% of the global market. It was followed by North America, Western Europe and then the other regions. Going forward, Africa and Middle East will be the fastest growing regions in this market.
Construction Competitive Landscape
Major Competitors are:
- • China State Construction Engineering Co
- • China Railway Group Ltd
- • China Railway Construction Corporation Limited
- • Vinci SA
- • Odebrecht Engenharia E Construcao Sa
Other Competitors Include:
- • Bouygues SA
- • Power Construction Corp. Of China
- • China Communications Construction Co Ltd
- • Bechtel Corporation
- • Grupo ACS
- • Bechtel Corporation
- • Fluor Corporation
- • Kiewit
- • Ledcor Group of Companies
- • EllisDon Inc
- • Aecon Group
- • SGS
- • Interconstruct
- • Anker Hansen & Co A/S
- • Christiansen & Essenbæk A/S
- • CC 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
- • CIMIC Group
- • Lendlease Group
- • China State Construction Engineering Corp Ltd
- • Shimizu Corporation
- • 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
- • ESTA Construction
- • Etalon Group
- • Glavstroy
- • LLC Stroygazmontazh
- • Denezam
- • DG Construction
- • Construction Group International
- • GERC
- • Perry Construction
- • CTR Group as
- • Babis Vovos International Construction
- • Berios
- • Consolidated Contractors 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
- • Dutco Balfour Beatty LLC
- • Julius Berger
- • Reynolds Construction Company
- • Thabimndeni Construction & Projects CC
- • Orascom Contstruction
- • Lubrik Construction Company
