The forecast comes from data and analytics company GlobalData, which says the industry is expected to regain some growth momentum from 2024 assuming an improvement in global economic stability.
The rate of recovery from the global COVID lockdowns has been significantly affected by the Russia-Ukraine conflict to which there is no resolution currently in prospect.
GlobalData says its forecast for continued slow growth this year takes into account a gloomy economic backdrop, and additional challenges specific to the global construction industry, notably high construction material costs and labour shortages.
Growth in the global economy is set to continue to slow in 2023, reflecting high inflation and tightening financial conditions that will constrain investment growth. The IMF predicts that global economic growth will slow to 2.7% in 2023, decelerating from 3.2% in 2022 and 6.0% in 2021. Although the recent easing of China’s zero COVID policy suggests that demand in China’s economy might be stronger than had been anticipated, economic growth in the US and Western Europe will stagnate.
Danny Richards, lead economist on construction at GlobalData, says the outlook for construction in Western Europe is gloomy, with activity being hit by a decline in investor confidence amid a looming economic recession and high inflation.
"Output will be severely hampered by weak investment growth, and high prices for key construction materials and energy costs, a trend that has been exacerbated by the impact of the Ukraine war given the importance of commodity supplies from Russia and Ukraine,” adds Richards.