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Following the historic collapse in construction activity in 2020 amid the severe disruption caused by restrictions imposed to contain the spread of COVID-19, the construction industry is set to grow by 5.2% in 2021, according to GlobalData, a leading data and analytics company. Output in 2021 will be 2.5% higher than the 2019 level.
Although recovering from the COVID-19 crisis, the global industry has borne a huge cost in terms of foregone revenue; compared to GlobalData’s pre-COVID-19 predictions for construction output value, the output total in 2020–2021 is close to US$1.1 trillion lower than it would otherwise have been.
According to GlobalData’s report, ‘Global Construction Outlook to 2025, Q1 2021 Update’, there is still great uncertainty over how the COVID-19 crisis will play out. On the one hand, positive news is stemming from the successful rollout of vaccines in many markets. On the other hand, there are concerns over the reports of new variants and challenges in getting vaccines supplies to developing markets. However, the forecast for the global construction output is predicated on the assumption that governments and public health authorities will not reintroduce strict lockdown policies and that construction sites will be able to continue to operate with minimal disruption.
Danny Richards, Lead Economist at GlobalData, comments: “In markets where the construction industry has managed to return to relatively normal level of operations since the crisis engulfed the world in Q2 2020, activity has rebounded positively, with signs that in some markets there has been a marked effort to get projects back on track quickly.”
The recovery in many markets in late 2020 surprised on the upside. This means the full-year outturn in 2020 was not as bad as previously expected – GlobalData estimates that global output contracted by 2.5% last year (compared to the previous estimate of 2.9%), and excluding China, the contraction stood at 5.1%.
Richards continues: “With activity levels trending upwards in the absence of restrictions on site works, there are likely to be record high rates of year-on-year (Y-o-Y) growth in major markets in the coming quarters, given the comparison to periods last year when construction sites were closed or when activity was severely disrupted. There are also positive signs for the coming quarters when assessing leading indicators, such as building permits approvals.”
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