Mubasher: Prospects for the world’s construction industry in 2020 are generally positive, although it has been facing challenges to achieve growth momentum, signalling a slowdown in the global economy, according to GlobalData.
In 2019, global construction sector witnessed an expansion rate of 2.6%, the slowest in a decade, pressured by low construction output growth in advanced economies such as the US, the UK, and Australia, Danny Richards, lead economist at GlobalData, remarked.
Nevertheless, global construction output growth is expected to increase to 3.1% in 2020, on the back of “projected improvement in the global economy in 2020, which, in turn, relies on improvements in financial market sentiment and a stabilization in some of the large currently-troubled emerging markets,” Richards noted.
Richards warned that intensifying geopolitical risks could negatively affect investor confidence early 2020 amid tensions between the US and Iran and a potential escalation in the trade war between the US and China.
“There is a risk that China could overstep its efforts to support the economy, resulting in an unmanageable debt crisis, which would disrupt investment trends globally, most notably via the impact on demand in commodities markets,” he added.
Other key emerging markets also face local political and economic challenges “that could erupt into full-blown crises, creating a risk of contagion across these markets,” he noted.