Market research firm ResearchAndMarkets released a new report on April 9 detailing an outlook for the global construction market, showing a substantially smaller growth expectation after factoring in impacts of the COVID-19 pandemic.
The report publisher previously predicted there would be an accelerated pace of growth in 2020 of 3.1 percent, compared to 2.6 percent in 2019. But given the severe disruption in China and other leading economies following the virus outbreak, the forecast has been revised down to just 0.5 percent.
The new report’s forecast assumes that the outbreak is contained across all major markets by the end of the second quarter of 2020 and that resulting conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year. However, the report notes there will be a lingering and potentially heavy impact on private investment owing to the financial toll inflicted upon businesses and investors across a wide range of sectors.
“Governments and public authorities will likely be aiming to advance spending on infrastructure projects as soon as normality returns so as to reinvigorate the industry,” the publisher states. “This will be spread across all areas of transport infrastructure and energy and utilities. With interest rates falling to record lows, borrowing costs will be at a minimum, but the success of government efforts to spend heavily on infrastructure will be dependent in part on their current financial standing.”
The publisher adds that with most governments prioritizing cash hand-outs, particularly to the economically weaker segment, their capability to invest in the infrastructure segment is likely to be constrained, especially in countries with high debts.