Construction Market Insights - APAC & GCC (November)

The Construction Market Insights report provides an overview of the construction industry in APAC and GCC, including macroeconomics, construction industry overview, commodity movements and supply chain outlook. 

Macroeconomic Overview  

Economic growth in Asia Pacific picked up in early 2024, supported by robust domestic demand and a surge in electronics exports. The IMF’s latest update lifts APAC’s 2024 growth forecast from 4.5% to 4.6%, with the region set to account for 60% of global growth. In 2025, favourable monetary conditions are expected to further boost activity, with growth revised up to 4.4% from 4.3%. 

The GCC region is maintaining steady growth, primarily driven by ongoing diversification efforts and public investments in non-oil sectors. Strong performance in industries such as tourism, logistics, and technology are helping to offset global economic challenges, positioning the region for continued resilience despite oil market fluctuations. 

Interest rates  

Hikes in interest rates have slowed down economic growth across the region, but overall growth remains positive. With inflation stabilizing, central banks are either maintaining policy rates at current levels or adopting the US Federal Reserve's rate cuts. In the APAC region, approaches remain divergent, with some countries following these cuts, while others are cautiously keeping rates unchanged due to anticipated inflationary pressures.

Construction Industry Overview

Despite challenges caused by elevated interest rates, high inflation costs, skilled labour shortages and a weak global economic outlook, construction output continues to grow, fuelled largely by substantial investments in critical sectors including infrastructure, data centres, semiconductors, and renewable energy.

Countries

• Japan - Japan's construction industry is projected to grow by 1.7% in 2024, driven by increased private investment in buildings and government spending on infrastructure projects, particularly in preparation for the 2025 World Exp in Osaka.

Over the forecast period, Japan's construction industry is anticipated to achieve an average annual growth rate of 1.1% from 2025 to 2027. This growth will be supported by increased investments in renewable energy, data centres, semiconductors, manufacturing, and commercial sector developments.

• Taiwan – Taiwan's construction output is expected to rise by 2.2% in 2024, driven by projects under the government's 2024 budget. Between 2025 and 2027, annual growth is forecasted at 3.9%, supported by investments in key sectors like semiconductors, transport, and housing. Taiwan’s net-zero emissions target for 2050 and its push to diversify energy sources are also expected to spur growth, particularly in renewable energy projects.
• Australia - Apart from the residential sector, which is expected to decline by 3.9% in 2024, all other construction sectors are projected to grow between 3.7% and 10.9% in real terms. However, since the residential sector accounts for more than 50% of total output, the overall growth of Australia's construction industry is expected to slow to 2% in 2024.

The construction industry is expected to record an average annual growth of 2.8% from 2025 to 2027, supported by investment in transport infrastructure, housing, data centres renewable energy, health, education, and the manufacturing sector.

• Singapore – Singapore's construction industry growth is expected to slow from 5.2% in 2023 to 3.3% in 2024, due to soft external demand and a decline in construction contracts issued in the first quarter of 2024. The industry is forecasted to grow by an annual average of 4.1% from 2025 to 2027, driven by investments in transport, renewable energy, and manufacturing, including the SGD21.9 billion high-speed railway project linking Kuala Lumpur to Singapore.
• Malaysia - Singapore's construction industry growth is expected to slow from 5.2% in 2023 to 3.3% in 2024, due to soft external demand and a decline in construction contracts issued in the first quarter of 2024.The industry is forecasted to grow by an annual average of 4.1% from 2025 to 2027, driven by investments in transport, renewable energy, and manufacturing, including the SGD21.9 billion high-speed railway project linking Kuala Lumpur to Singapore.
• KSA - KSA's construction industry is projected to expand by 4.4% in real terms in 2024, driven by increasing Foreign Direct Investment (FDI) and substantial infrastructure investments in preparation for hosting the 2034 FIFA World Cup. These developments are part of the broader Vision 2030 initiatives aimed at diversifying the economy.
• India – India's construction industry is projected to grow by 7% in real terms in 2024, driven by robust investments from both public and private sectors in manufacturing, data centres, semiconductors, energy, and transportation infrastructure. Over the 2025-2027 period, the sector is expected to achieve an average annual growth rate of 5.8%, fuelled by ongoing investments in green energy projects, and developments in roads, railways, and housing.
• UAE - The UAE's construction sector is projected to grow by 4.6% in real terms in 2024, driven by ongoing infrastructure, energy, utilities, oil, gas, and residential projects.

Download the full report to access these insights and analysis of the construction market for the United States and Canada.