By Lindsay Edwards
With the worst of the downturn behind us, the construction industry in the U.S. is back to growth. While we aren’t seeing stratospheric growth, the green shoots are very much established. And do we really need another boom and bust cycle so soon after the sub-prime fuelled mess of the last few years? Few would actually want that to happen again.
Recent data would suggest that 2014 isn’t going to be a standout year for construction, but that it will still post moderate growth across the board. This hasn’t been helped much by the exceptionally cold winter we have been experiencing, with house sales dropping to an 18 month low on the back of the cold weather. It’s hardly surprising. When the roads are like a sheet of ice, people aren’t going to go out as much. But the concensus seems to be that if you were set on buying a house, the purchase has merely been deferred.
China for Growth?
So where can we look to for strong growth outside our own borders? The incredible boom in construction in China, and skyrocketing house prices, is well known. But it’s also very possible that we are going to see that market implode on itself under the weight of eye watering levels of debt.
The wise money has probably already made its way elsewhere. Mexico, Indonesia, Nigeria and Turkey are the next BRICs. These countries, despite the recent market turmoil, are forecast to be the next economic giants of the world. For example, Mexico, already the world’s 14th largest economy with some projecting growth to become the world’s 5th largest economy by 2050, is planning to build five million social homes. Meanwhile in Turkey, the value of the construction market is forecast to grow by just over 56% in the 2012-17 period. That’s a lot of opportunity.
While most of the old continent is still lagging, there are signs of economic activity picking up. Randstad recently reported that in September 2013 the UK’s housebuilding industry posted growth at “the fastest rate in almost ten years… thanks to the government’s Help to Buy scheme.” Germany’s construction industry also posted 3.8% YoY growth in December 2013. Other Eurozone powerhouses, namely France, Italy and Spain, are still, however, lagging behind even though we are seeing more positive economic data emerge.
The U.S. market is growing. That’s a good thing. But for constructors who want to expand internationally, there is a lot of opportunity close to home in Mexico, further afield in the other MINT countries, and in the advanced economies of Europe.
Lindsay is a freelance writer who covers news and events in the economy and industry. When she is not working, which is seldom, she enjoys travel and authentic Italian food.