India on way to becoming 3rd-largest construction mkt by 2020

India on way to becoming 3rd-largest construction mkt by 2020
The Financial Express, November 17, 2009, Page 12

fe Bureau, Chennai

In just ten years India will move from the ninth-largest construction market in the world to the third slot— only below construction giants China and the US, says a new ten-year forecast from Global Construction Perspectives and Oxford Economics.

According to the report, by 2020, the country’s construction market will be worth almost $650 million making up 5% of the world’s total construction output. Demand for both affordable and quality housing along with government investment in infrastructure will help to drive growth for construction companies operating in India.

The ten-year projection indicates that emerging markets will rapidly overtake the construction output of their developed neighbours with China overtaking the US and becoming the world’s largest market as early as 2018 and with a 19.1% share worth almost $2.4 trillion by 2020.

The report predicts that by 2020 Nigeria, Vietnam and Turkey will be amongst those experiencing highest growth levels over the next decade along with booming markets like India and China. The construction output of the emerging markets in the Asia-Pacific region will grow by 125% over the next decade.

The top ten highest growth markets by 2020 will be entirely composed of emerging markets with Poland the only European country to feature on the list.

Speaking at the launch of the report Global Construction 2020 in London, Mike Betts of Global Construction Perspectives said that across the board India’s construction industry will continue to grow, “The construction market in India is already enjoying very healthy growth rates which will only get better over the next decade. Most importantly, the country will experience serious growth in all of the different construction sectors and will be a key market for many of the world’s largest construction companies.”

Adrian Cooper of leading business forecasters Oxford Economics said, “We have identified the key drivers and used data including population projections, long-term GDP estimates and public sector budgets to feed into our modeling to help us understand how the global construction industry is changing at a rapid rate.

“All of the data points to both short and long term growth in emerging markets. We predict that in just ten years time construction in these markets will be more than double in size, growing by an estimated 110% and representing 17.2% of GDP in 2020.”

The report predicts that today’s global construction market is worth an estimated $7.5 trillion, representing 13.4% of global GDP. But by 2020, construction will be a $12.7 trillion global market, an overall growth of 70% in the next decade. Construction in 2020 will account for 14.6% of global GDP.

The infrastructure construction market in emerging markets will grow by a staggering 128% over the next decade to 2020, compared with just 18% over the same period in developed countries.

The largest construction market globally is residential accounting for 40% of the total global construction market by 2020 when it will be worth $5.1 trillion.