Global construction activity will continue growing this year despite a contraction in China observed in 2021, according to worldsteel.
The association’s positive perspective is supported by strong infrastructure initiatives observed in many countries, as well as upcoming investments related to the energy transition. However, construction faces headwinds from rising costs and interest rates, Kallanish notes.
“Like other sectors, the global construction sector is experiencing supply problems, leading to increasing costs,” worldsteel observes. This along with the move of central banks to raise interest rates to fight inflation may play a negative role in the growth of construction activity between 2022 and 2023.
“The residential sector was performing well due to low interest rates and the expansion of working from home practices. Accelerated inflation is forcing buyers to rush into property markets, using them as a hedge. However, rising housing prices might undermine future housing affordability for some social groups,” the association comments.
In the non-residential sector, while office buildings suffered from remote working practices, e-commerce and IT-related investments supported the sector.
“We see strong growth in the multi-unit segment in the US. Large infrastructure investment and recovery in energy-related projects are also expected to boost construction activities in the country,” worldsteel continues.
Meanwhile, in China, government policies to combat the housing bubble should fuel the recovery of the construction sector, with infrastructure projects being the main factor. In India, the increase in activity will be supported mainly by the building of new highways, railways, water infrastructures and housing. Worldsteel sees the construction sector in Brazil as having moderate growth in 2022 due to the monetary tightening cycle and the US interest rate hikes.
Todor Kirkov Bulgaria