Construction Key Themes 2025: Rebound in sight

Global construction activity is forecast to rebound over 2025 as strength in the rest of the world offsets the ongoing Chinese real-estate downturn. In this report, we discussed the key themes that will dominate the narrative of the construction sector over 2025, addressing five critical questions:

• What’s the outlook for construction sector in 2025? Falling interest rates and an ongoing housing shortage in many advanced economies will drive growth in building construction activity. However, the magnitude of the Chinese real estate downturn however will ensure headline global building activity falls.
• Which areas will drive construction spending growth? While civil engineering has remained the fastest growing construction sector since 2022, we are seeing a transition in activity from transportation to utilities as countries work towards their climate targets. Additionally, the move towards fiscal consolidation by many governments is set to see the private sector play more of a role in financing infrastructure projects. We are seeing a growing interest in Public Private Partnership opportunities.
• Which region will experience the strongest growth in construction activity? Strong demographic trends, robust foreign investment and government policy will see South-East Asia remain the fastest growing region for construction activity. Notably, Singapore will be the fastest growing market in Asia, and the second fastest growing market globally.
• What is the primary constraint facing the construction sector? Construction activity will grow faster than the number of workers in advanced economies. European labour shortages sustain a significant backlog of work in the European Union. Labour shortages are also a challenge in the US.
• How will geopolitical factors, such as Trump 2.0 and the Russia-Ukraine war, influence the construction activity? Greater geopolitical uncertainty risks causing supply chain disruptions and increasing financing costs, which could see construction projects delayed or cancelled.

Download the full report to uncover the full analysis.