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Despite weaker than expected annual growth of +1.3 percent in gross domestic product (GPD) during the second quarter 2011, private sector investment in U.S. construction rose by an annual rate of +8.1 percent for non-residential and +3.8 percent for residential construction, reversing declines in the first quarter of 2011, according to a recent report.
Spending on US construction is forecast to grow by an annual average of +5.9 percent during the next decade to 2020 outpacing growth in GDP, say Global Construction Perspectives and Oxford Economics in their global report on the outlook for construction during the next decade, Global Construction 2020.
“Construction in the US is expected to rebound from the downturn led by short-term double digit growth in both residential and non residential markets,” says Graham Robinson, director of Global Construction Perspectives and an author of the Global Construction 2020 report.
Global Construction Perspectives and Oxford Economics estimate $14.5 trillion will be spent on U.S. construction in 2010 prices during the next decade to 2020.
The annual rate of growth in private sector investment in residential construction, at +9.4 percent, also outperformed GDP growth of +3.9 percent in Canada during the first quarter of 2011 whilst investment in non-residential construction grew by an annual rate of +11.8 percent driven by +15.4 percent growth in infrastructure investment.
Global spending on construction is also forecast to outpace world GDP during the next 10 years as growth in Asian powerhouses and a cyclical rebound in the U.S. fuels growth in construction from the current $7.2 trillion to $12 trillion by 2020.
“China overtook the US in 2010 as the world’s largest construction market, but the US will still remain the world’s second largest construction market in 2020,” says Doug Godden, senior economist at Oxford Economics.
India will overtake Japan to become the world’s third-largest construction market by 2018.
Seven countries — China, the United States, India, Indonesia, Canada, Australia and Russia — will account for two-thirds of growth in global construction to 2020, say Global Construction Perspectives and Oxford Economics.
Growth in China, India and the U.S. will account for more than one-half of the predicted $4.8 trillion growth in global construction to 2020.
A cyclical rebound as well as a growing population will drive growth in construction in the US, whilst rising populations, rapid urbanization and strong economic growth are key drivers for construction in emerging markets.