Construction Market to Grow by USD 1,179.2 Billion (2024-2028),Vendor Strategies Boost Growth, AI-Powered Market Evolution Report - Technavio

The construction market is poised for significant expansion, with the market size projected to increase by USD 1,179.2 billion at a CAGR of 5.31% between 2023 and 2028. Growth is driven by rising investments in infrastructure construction, the development of smart cities, and the adoption of advanced construction technology to optimize construction projects. The industry is shifting towards sustainable construction materials while addressing challenges such as construction costs and construction safety regulations. However, the shortage of skilled labor continues to be a pressing issue affecting project execution across residential construction, commercial construction, and infrastructure construction.Key insights into market evolution with AI-powered analysis. Explore trends, segmentation, and growth drivers- View Free Sample PDF

Market Segmentation

The construction market spans across various types and end-users. The key market segments include:

By Type

1. Buildings Construction: This segment is poised for considerable growth during the forecast period, driven by rapid urbanization and demand for residential, commercial, and public infrastructure.
2. Heavy and Civil Engineering Construction: Encompassing large infrastructure projects like roads, bridges, and airports.
3. Land Planning and Development: A growing need for urban expansion and the creation of functional spaces.
4. Specialty Trade Contractors: Including highly skilled trades in areas like plumbing, electrical, and HVAC systems.

By End-User

1. Private Sector: Comprising residential and commercial developers focusing on private infrastructure.
2. Public Sector: Encompassing government projects for public utilities, facilities, and infrastructure.

By Geography

• APAC
  • China
  • India
  • Japan
• Europe
  • Germany
• North America
  • US
• Middle East and Africa
• South America

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Key Drivers of Market Growth

One of the primary drivers of this growth is the sustained investment in infrastructure. Governments worldwide are allocating substantial resources to infrastructure development, particularly for large-scale projects such as sports facilities, which saw a significant boost during the 2022 FIFA World Cup in Qatar. The demand for new construction is also being driven by the increasing urban population—by 2050, approximately 80% of the global population is expected to reside in urban areas, further fueling the need for modern residential and commercial spaces.

Moreover, the construction industry is embracing sustainable and innovative practices, with a growing focus on green technologies, energy efficiency, and eco-friendly materials. This trend is also reinforced by the rise of smart cities, which integrate cutting-edge technologies and communication systems to enhance urban operations.

Challenges Facing the Construction Market

One of the biggest challenges the construction industry faces is the shortage of skilled labor, which is impacting project timelines and budgets. Many companies in countries like the US and Germany are struggling to secure enough skilled workers, particularly in specialized roles such as site managers and technicians. The labor shortage is expected to delay several key projects, particularly in the framing and foundation stages.

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Key Players in the Construction Market

The construction market is highly competitive, with numerous companies vying for market share through strategic partnerships, mergers and acquisitions, and innovative projects. The key players include:

• ACS Actividades de Construccion Y Servicios SA
• AECOM
• BAUER AG
• Bechtel Corp.
• Bouygues Construction SA
• China State Construction Engrg. Corp. Ltd.
• Clark Construction Group LLC
• Etex NV
• Fluor Corp.
• Gilbane Inc.
• Hindustan Construction Co. Ltd
• Jacobs Solutions Inc.
• Larsen and Toubro Ltd.
• Lendlease Corp. Ltd.
• M. A. Mortenson Co.
• McCarthy Building Companies Inc.
• PCL Constructors Inc.
• Shimizu Corp.
• Skanska AB
• Turner Construction Co.
• Vinci

Recent Developments

• February 2024: Vinci announced a strategic partnership with a tech firm to integrate AI into construction processes for smarter project management and resource allocation.
• January 2024: Larsen and Toubro secured a major contract to develop a smart city project in India, focusing on sustainable building designs and urban infrastructure.
• December 2023: Bechtel completed the development of a new sports stadium in Qatar as part of the infrastructure legacy from the 2022 FIFA World Cup.
• November 2023: Skanska AB launched a green building initiative in Europe, aiming to reduce the carbon footprint of its construction projects.

Future Insights

The construction industry will continue to evolve with advancements in construction technology, sustainable materials, and smart city infrastructure. Addressing construction safety and labor shortages will be crucial for sustaining long-term growth. The increasing demand for residential, commercial, and infrastructure construction will drive the market forward in the coming years.