News
/
4/22/2025
Infrastructures drive the global construction market
Moderate improvement in global construction expected in 2025 with good prospects for public projects
In 2024, the global construction market grew by 2.3%, signaling a slowdown compared to the previous year. While public-funded infrastructure projects drove growth —especially in the energy sector —residential construction faced stagnation or decline. Forecasts for 2025 suggest a moderate rebound, with regional variations and geopolitical risks influencing market performance.
The value of the global construction market in 2024 grew by an estimated 2.3% with a total value of over 15,000 billion US dollars. This means a registered net slowdown with respect to 2023, which closed with an increase in investments of more than 4%. Forecasts for 2025 indicate a moderate improvement in the overall situation of the global construction market, with growth expected to be 2.8%. Further strengthening of market dynamics is expected for next year. The graph below summarises the trend for last year and the forecast for 2025 in the various geographical areas.
It is clear that the construction sectors financed through public funding (infrastructure, energy and utilities) benefitted from the higher growth rates and enjoy a more positive outlook in terms of growth in the upcoming years. The commercial and industrial sectors, on the other hand, registered more moderate rates of growth, while the global residential sector encountered a recession last year, which will leave space for it to remain more or less stagnant in 2025.
The main driver behind this positive outlook for infrastructure constructions is the energy sector, where extraordinary investment plans have been put in place by Governments to sustain the construction market (and the economy in general). The main one is the package of measures called Build Back Better with a value of 1.2 trillion dollars, which was presented by the Biden administration in the USA and received bipartisan support. Various national plans of considerable value have been implemented in Europe with funds aimed mainly at the construction of infrastructures.
In view of the current international context, there is a certain degree of uncertainty behind any forecast due to the following risk factors:
- An increase in tensions at international level, such as the conflicts in Ukraine and the Middle East and the dispute between China and Taiwan, which could lead to restrictions in international commerce.
- Uncertainty on policy direction of the new Trump administration.
- Interest rates remain high, reducing access to funding for families and businesses.
- Inflation rates remain high, affecting family consumption and business investment.
The forecasts based on currently available data and the factors mentioned above are explained in the following paragraphs.
Asia-Pacific
In 2024 the construction sector in this area grew by an estimated 3.3%. The South Asia region (which includes India) was the most dynamic, registering an increase of more than 7%. Positive dynamics also for the construction sector in the South-West area, with a 7% growth in investments stimulated by the positive trend of the Indonesian market. Market growth was more moderate (+2.5%) in the North-East Asia region due to the stagnation in the Chinese construction sector. More modest development was seen in the Australian and New Zealand markets with growth estimated to be 1.2%, so in line with the trend of the more mature markets.
The forecast for 2025 points to a similar trend to the one registered in 2024, influenced by a continuation of the rather modest performance of the Chinese market and a more dynamic development in the rest of the region region. India is the country in which the construction industry enjoys the most positive forecast for the current year: it is believed investments in the construction industry will grow by 6.2% with respect to 2024.
A modest improvement in the situation in the Australasian construction sector is expected. Forecasts for the trend in the construction market for 2026 point to growth of more than 4%, with an increase in investments in all the main markets.
Middle East and Africa
This region registered moderate growth in 2024, influenced by the ongoing conflict in the Middle East and rather modest dynamics in the Sub-Sahara region. Forecasts for this region are highly complex and are subordinate to how the conflict develops. In the case of hostilities coming to an end, the construction market could start growing in 2025 at a rate of more than 5% and a similar outlook is also forecast for the following year.
The forecast for 2025 points to a similar trend to the one registered in 2024 in Asia, influenced by a continuation of the rather modest performance of the Chinese market.
North America
In 2024 construction activity in this area grew at a rate of slightly less than 4%. A 4.5% growth in investments in the USA was contrasted by a recession in the Canadian construction sector of -1.5%, motivated by a growth in construction costs and a shortage of specialised labour. For 2025 forecasts for the North American construction market are positive. The US construction output value should continue to grow by 4%, thanks to the enormous volume of public funds dedicated to the infrastructure and non-residential sectors. For the current year, in Canada the construction sector should overcome the phase of recession and grow in value by 2.5%. On the whole, construction output for 2025 in North America is expected to increase by almost 4% and then to develop by a further 3.5% in the following year.
Latin America
In 2024 the value of construction activity grew by around 1% and saw a considerable slowdown with respect to the previous year, which closed with a growth in investments of almost 5%. Last year, the positive dynamics of the Mexican construction sector were offset by stagnation in the Brazilian construction sector, while Argentina went through a period of recession.
For 2025 the forecasts for this region are negative and investments in the construction sector are expected to contract slightly. The recession expected in the Mexican construction sector will weigh particularly heavily, due to the completion of infrastructure projects planned by President Andrés Manuel López Obrador, whose term in office came to an end last September. In all the other Latin American countries the construction industry should register moderate growth in 2025.
The outlook for the region is for investments in the construction sector to start growing only from next year.
Western Europe
In 2024 this region suffered the worst trend in investments in the construction sector out of all the world markets, which in fact shrank by 1.6% with respect to 2023. Last year the main markets in the region saw a drop in construction output. In Germany this drop in the market was estimated to be almost 6% in 2024 and, in 2025, only a very modest upturn (+0.9%) is expected.
In France investments shrank by more than 3% in 2024 and, for the current year, an increase of just 1.3% is forecast.
Recession in the British construction sector in 2024 was estimated to be 2.3% and for 2025 the sector is expected to be more or less stagnant.In Spain, on the other hand, investments grew last year by 2% and the rate of market growth should strengthen in 2025, reaching almost 3%.
Forecasts for 2026 point to a moderately positive trend for Western Europe and forecasters believe the market could grow by around 2%.
Investments in the Italian construction sector shrank by around 3.3% in 2024 after registering an identical rate of growth the previous year. Forecasts for 2025 point to a heavy fall in investments, which is estimated to be around 5%, and following on in 2026, the value of the Italian construction sector is expected to be in recession at a rate of around 1%. The value of the residential sector is forecast to drop considerably in 2024 and 2025 due to tax incentives coming to an end. Forecasts for the sector are also negative for 2026. The non-residential construction sector is expected to expand by 5.8% in the current year and then by an annual average of around 3% in 2025-2026. In 2024 ongoing investments in the civil engineering sector were the most dynamic component of the Italian market, registering an increase of 9% with respect to 2023.
In 2024 the value of the Italian construction market was 288 billion Euros and the 7th highest in the world in terms of investment value. The ranking is dominated by China and features mainly countries from the Asia Pacific region, which includes 6 of the largest markets of the global construction industry.
The ranking in the global construction market is dominated by China and features mainly countries from the Asia Pacific region.
News
Market
3/21/2024
Infrastructures: driver for global construction
