Impact of COVID-19 on Construction Industry Market

The global construction market size declined from USD 11,217.4 billion in 2019 to USD 10,741.2 billion in 2020. However, the industry has shown signs of recovery since the beginning of 2021 and is expected to reach a market size of USD 13,572.4 billion in 2024, a CAGR of 6.0% between 2020 and 2024. An increase in automation in public spaces, government initiatives and rising awareness about antibacterial construction materials, is expected to boost the construction industry post the COVID-19 pandemic. However, the shutdown of manufacturing facilities, non-availability of raw materials, and the impact on supply chain and logistics is expected to constrain industry growth.

The pandemic has created many challenges for businesses, governments and other organisations around the world. Companies working in different sectors are reacting in different ways to ensure business continuity, supply chain flexibility, and other measures generate revenue. The uncertainties with regard to the pandemic have affected the heavy and civil engineering sector, but a few civil engineering activities have been maintained to some extent and are likely to continue in long term. There was no complete lockdown in several countries, and hence, companies are willing to continue executing their contracts to avoid liquidated damages. However, in 2020 these activities were halted for some time, as supply chains were disrupted by a shortage of equipment and materials. In addition, public agencies and administrations had terminated contracts to control expenses.

Asia-Pacific (APAC) is projected to register the highest CAGR in terms of value in the global construction industry during the forecast period. APAC dominated the construction industry in 2019. Construction companies have ample opportunities in the APAC market in comparison to their European and North American counterparts owing to low-cost labour and raw materials. Various raw material companies halted their production in the initial phase of covid-19 to avoid further spread of the virus. This halt in production has led to reduced supplies in various Asian countries, including India and China.