Global construction market forecast to hit US$16.6tn by 2050

Global construction activity is forecast to increase by more than 70% by 2050 to reach US$16.6 trillion, according to new research from Oxford Economics. Image: Adobe Stock

The report, commissioned by the Global Cement and Concrete Association (GCCA), identifies five megatrends expected to drive construction demand over the next 25 years: population growth and urbanisation; infrastructure and housing deficits; climate adaptation; sovereignty and strategic resilience; and high-tech infrastructure.

Oxford Economics said global construction activity almost doubled over the past 25 years and expects substantial further growth to 2050, although it warned that infrastructure delivery is already failing to keep pace with demand.

Closing that gap will require more effective planning and procurement, clearer long-term infrastructure pipelines, greater public-private collaboration, expanded construction capacity and access to long-term capital, according to the report.

Adrian Hart, author of the report at Oxford Economics, said, “The world is entering an extraordinary period of infrastructure demand. Population growth, urbanisation, climate change, geopolitical uncertainty and new technologies are fundamentally reshaping what we need to build, where we build it and how we build it.”

He added, “Our research shows global construction activity will increase by more than 70% to US$16.6 trillion by 2050.”

Concrete demand to rise

The report also forecasts significant growth in demand for concrete as infrastructure and housing investment increases.

Oxford Economics estimates that annual concrete demand from the utilities, transport and social building sectors alone will reach 20 billion tonnes by 2050.

The GCCA said meeting that demand while reducing emissions would require greater use of lower-carbon cement and concrete alongside investment in new production technologies.

Thomas Guillot, chief executive of the GCCA, said governments would need to help stimulate demand for lower-carbon materials, support greater circularity and enable the deployment of carbon capture technologies.

The report also calls for resilience to be considered alongside sustainability and decarbonisation when infrastructure is designed and procured, particularly as assets face increasing climate and physical risks.

Other recommendations include improving construction productivity through innovation, developing better infrastructure data and reporting systems, and ensuring the industry retains sufficient capacity to meet rising demand despite increasing costs.

Oxford Economics said the challenge over the coming decades would be not only to build substantially more infrastructure and housing, but to do so while improving resilience and reducing emissions across the construction value chain.

The full report can be read here.