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Market survey

19 MAR 2019

Global Construction Monitor

The Global Construction monitors are a sentiment indicator of the construction and infrastructure markets in the UK, Europe, Asia Pacific, North America, Middle East and Africa.

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Highlights from Q3 Global Construction Monitor

While the economic conditions across many parts of the world have deteriorated, some regions have seen construction workloads grow, with the Middle East and Africa region in particular breaking the trend.

Overall, infrastructure workload expectations remain positive for the year ahead, with a net balance of +40% of respondents forecasting an increase in output in the Americas, APAC and MEA. Europe's net balance lags behind these regions, coming in at just -3%, consistent with a flat trend in infrastructure workloads over the next 12 months.

Worldwide, an overall net balance of +15% of respondents expect headcounts to rise in the construction industry over the next year; albeit still positive, this is the lowest reading since the end of 2020.

 

Key insights from regions covered in this quarter’s report include

UK: Construction Activity Index figures for the UK and Ireland were marginally positive in Q3 but considerably weaker than last quarter, with new business enquiries reported to be rising but modestly compared to Q2.

Workload activity of the whole industry was reported to have lost momentum over the past quarter, with only +17% (in net balance) reporting an increase, compared to +30% (in net balance) who reported an increase last quarter.

Asia Pacific: Results for this region indicate broadly neutral sentiment, with the headline Construction Activity Index falling slightly from +5 to -1 during Q3. In India and Singapore, the activity index remains strong, with a modest improvement compared with Q2 (+50 to +53 and +24 to +31 respectively). New Zealand and Australia are also reporting solid levels of activity, however, feedback from China and Sri Lanka continued to weaken, with an activity index of -17 for China and -55 for Sri Lanka. .

Europe: Construction activity across Europe slowed significantly in Q3 2022 as energy prices soared, weighing heavily on the broader economy. Germany showed the lowest CAI reading within Europe, with a figure of -20 (down from +8). Negative readings were also reported in France, Italy, Spain, and the Netherlands.

Due to intense input cost pressures, contributors expect profit margins to narrow during the next year and this expectation was reported by every European country covered.

Middle East and Africa: There is a steady CAI at +20 for the region compared to +18 last quarter. Saudi Arabia stands out as particularly strong with its CAI at +68, along with the UAE (+37) and Nigeria (+31), all of which are benefiting from the increase in oil prices.

While the South African economy is heading for a technical recession, there seems to be a perception that (at least in net balance terms) construction activity will pick up through 2023 with infrastructure being the area growing most significantly.  

North America: There was a further easing in sentiment for both Canada and the United States over the quarter. Respondents commented on inflation, costs of materials and labour as significant challenges. During the period under review, private residential workload expectations fell into negative territory (-7%) across the United States, coming down from a net balance of +20% previously. Private commercial output expectations also eased but remain positive.

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