International. The global building construction market is expected to grow from $5.878 billion in 2020 to $6.454 billion in 2021 at a compound annual growth rate (CAGR) of 9.8%, the latest Research and Markets report revealed.
The growth is mainly due to companies reorganizing their operations and recovering from the impact of COVID-19, which had previously led to restrictive containment measures involving social distancing, remote work, and closing business activities that resulted in operational challenges. The market is expected to reach US$8.751.56 billion by 2025 at a CAGR of 8%.
Asia Pacific was the largest region in the global building construction market, accounting for 44% of the market in 2020. North America was the second largest region and accounted for 27% of the global building construction market. Africa was the smallest region in the market.
Building construction companies are increasingly using green building techniques to construct energy-efficient buildings and reduce construction costs. According to the 2015 Global Green Building Trends Survey, approximately 51% of construction companies in the UK were involved in green building projects. Certifications such as Leadership in Energy and Environmental Design (LEED) help construction companies develop sustainable, high-performing residential and commercial buildings, and also offer a variety of benefits, from tax deductions to marketing opportunities.
Sustainable building materials, such as natural paints and steel beams made from recycled material, are widely used in this industry. Other green building techniques such as cross ventilation for a more natural environment, green building software such as Construction Suite to ensure green compliance, and the Green Globes management tool are also being used in the construction industry. For example, some of the major companies using green building techniques include Turner Construction Co, Clark Group, AECOM, Hensel Phelps, and Holder Construction.
Material costs increase
Building construction costs have steadily increased due to the increase in material costs in the historical period. Companies in the industry experienced moderate growth in their profits with rising prices for materials such as crude oil, a key component of asphalt that increased by 49%; softwood, an important component used for the construction of buildings, which increased by 23% during the historical period. In 2018, cement prices increased by 2.5% and plumbing and fittings increased by 3% in the US. High material prices adversely affected the building construction market during the historical period.
The population profile of most countries is ageing, increasing the demand for infrastructure adapted to older people. According to estimates based on data from the U.S. Bureau of Population Reference, the global population over the age of 65 increased by about 33% between 2013-2017, from 450 million to 601 million. Therefore, the demand for infrastructure improvements that are favorable to the elderly increased during the historical period. Homes and the wider environment had to adapt to be safer and more inclusive. The best residential and non-residential buildings should be made more accessible to the elderly. This resulted in an increase in building construction activity.
