Despite facing prolonged supply chain disruptions, rising materials costs and labour shortages, the construction industry is set to lead economic recovery from the COVID-19 pandemic globally, and in Canada.
Although the near-term global economic outlook remains clouded by surging inflation and supply chain bottlenecks, the global construction industry is expected to grow faster than the manufacturing or service sectors, according to a forecast to 2030, The Future of Construction, issued by Marsh in partnership with Oxford Economics and Guy Carpenter.
“The construction industry has demonstrated remarkable resilience during the worst of the coronavirus pandemic and over a period of significant disruption to the global economy,” the report stated.
Global construction is expected to grow by US$4.5 trillion over the decade to 2030 and reach US$15.2 trillion. Just four countries — China, India, the U.S. and Indonesia — will account for almost 60% of this growth while the top 10 global construction markets are expected to account for almost 70% of the growth over the same period, the report said.
Growth drivers Consumers unleashing pent-up household savings will drive growth in residential construction. Workplace construction will be sparked by growth in working-age populations in countries including Canada, Indonesia and India. There will also be more demand for industrial and logistics space to support growth in online retail and manufacturing.
While the report suggests climate change and the race to net zero emissions will be the greatest challenges facing the global construction industry, Canada’s construction companies are struggling with ongoing labour shortages, a risk advisor says.
“We’re seeing massive growth in the construction space matching these global trends, including increased infrastructure projects and the continued residential boom, that will certainly be a key driver of economic growth in Canada,” said Rosy Mounce, a commercial risk advisor with CapriCMW insurance, a member of the Canadian Broker Network. “However, in addition to the supply chain and other challenges our construction clients still face, the main obstacle is ensuring they have enough boots on the ground to get all the work done.”
Another emerging trend, Mounce said, is rising sophistication in how construction clients ensure they are properly protected for the contracts they take on, especially when it comes to specific government-required insurance compliance.
This in turn demands that brokers understand these exposures and are familiar with the various construction contracts so they can properly support their clients.
It doesn’t seem that any of the prolonged challenges will halt growth for the industry in the long run, Mounce added.
“We have contractors booking work out years in advance. I was talking to a builder the other day who said he has never worked so hard in his life and despite these struggles, he’s more determined than ever to finish the work with quality. That’s so inspiring,” Mounce said.