The report says that, although construction output in the rest of the world will grow nearly 6% a year from 1999 to 2003, growth in the world’s largest market – the USA – will slow to 1.7% a year. Several of the UK’s biggest firms have said they will expand in the USA this year.
Author Christopher Holling, principal of global market planning for Standard & Poor DRI, said: “The US market is attractive because of its size, but the boom is tailing off. UK builders should look at strengthening links with the rest of Europe.”
The report, which forecasts construction expenditure and degree of risk in 58 countries, claims that the areas it covers account for 97% of the world’s estimated £2.5 trillion construction market.
The report says China is set to overtake the USA as the world’s largest market by 2010, but it is also one of the riskiest.
Holling advises construction firms to pick their markets carefully in Asia, pointing to South Korea as the best bet for high growth but relatively low risk.
By workload, the fastest growth in global construction will be in civil engineering. The report says it will grow 6.1% a year between 1999 and 2003. Over the same period, the non-residential sector will grow 5.1% as the European market develops and emerging markets see increased demand for manufacturing and office space.
Housing is expected to grow at an average of 4.4% a year from 1999 to 2003. This is largely because of changing lifestyles in developing countries, where more people are demanding their own homes.
The report was produced by economic forecaster Standard & Poor and construction information specialist FW Dodge, both subsidiaries of McGraw-Hill.
Building New Markets – Global Construction Market Opportunities and Risks is available from Claire Dancaster at Standard & Poor, tel 0181-545 6286.