Infrastructure and sustainability to drive construction’s growth
By Andy Brown03 December 2021
The global construction market is set for a sustained period of strong growth post-Covid-19, driven by government spending on infrastructure and the transition to a net zero society, according to a new report from Allianz Global Corporate & Specialty (AGCS).
The strong growth outlook for the sector is based on a number of factors, such as rising populations in emerging markets and significant investment in alternative forms of energy such as wind, solar and hydrogen, as well as power storage and transmission systems.
Buildings are not only expected to improve their carbon footprint, but will also require improved coastal and flood defences and sewage and drainage systems in response to more frequent extreme weather events. At the same time, governments in many countries are planning major public investments in large infrastructure projects to both stimulate economic activity after the pandemic crisis and drive the low carbon transition.
However, the report cautions that this move to more sustainable buildings and infrastructure and the adoption of modern building methods will add to the pressure on already stressed supply chains, shortages in materials and labour, and increased costs.
“The industry faces new challenges around supply chain volatility and spiking material costs, skilled workforce shortages and the heightened focus on sustainability. In addition, the accelerated deployment of cost-cutting strategies and implementation of new technologies and designs may well result in accelerated risks for construction companies and insurers alike,” said Yann Dreyer, Global Practice Group Leader for Construction in the global Energy & Construction team at AGCS.
President Biden’s US$1.2 trillion infrastructure bill and the EU’s proposed €300 billion (US$339 billion) Global Gateway plan are seen as examples of demand increasing for the construction industry.