Construction Market to Grow by USD 1.17 Trillion from 2024-2028, Driven by Increased Residential and Commercial Projects, with AI Redefining Market Trends - Technavio

NEW YORK, Feb. 7, 2025 /PRNewswire/ -- Report with market evolution powered by AI - The global construction market  size is estimated to grow by USD 1.17 trillion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  5.3%  during the forecast period. Increase in residential and commercial infrastructure projects is driving market growth, with a trend towards integration of ai in construction sector. However, high cost of construction machinery  poses a challenge. Key market players include ACS Actividades de Construccion Y Servicios SA, AECOM, BAUER AG, Bechtel Corp., Bouygues Construction SA, China State Construction Engrg. Corp. Ltd., Clark Construction Group LLC, Etex NV, Fluor Corp., Gilbane Inc., Hindustan Construction Co. Ltd, Jacobs Solutions Inc., Larsen and Toubro Ltd., Lendlease Corp. Ltd., M. A. Mortenson Co., McCarthy Building Companies Inc., PCL Constructors Inc., Shimizu Corp., Skanska AB, Turner Construction Co., and Vinci.

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Key Market Trends Fueling Growth

The construction market is thriving with trends in building frameworks using efficient models and designs. Securing permissions and site preparation are crucial initial steps. Excavation and framing follow, with utilities installation, interior and exterior work. Raw resources like clay, stone, timber, brick, concrete, metals, and plastics are essential. Notable projects include houses, commercial buildings, roads, dams, airports, and public facilities. Infrastructure development includes smart cities, schools, healthcare centers, tourism, retail activities, and economic development. Sustainability regulations and innovative technologies, such as 3D printing, are driving the industry forward. Civil engineering plays a significant role in constructing bridges, buildings, and infrastructural properties. Climate change and IT and telecommunications are influencing product offerings. Laborers are essential, and maintenance is ongoing. Infrastructure projects include housing, office spaces, and cold storage facilities. Infrastructure and structures are interconnected, with efficient infrastructure crucial for economic growth. 

The global construction industry is undergoing a major shift with the integration of Artificial Intelligence (AI) technologies. This trend is fueled by the requirement for increased efficiency, better decision-making, and streamlined project management. Mytek's introduction of an AI-based platform in April 2024 is a prime example of this transformation. This innovative technology assists contractors in delivering infrastructure projects more effectively. It optimizes processes, enhances resource allocation, and improves risk management. Furthermore, it boosts efficiency and facilitates improved communication with stakeholders. By leveraging AI capabilities, the platform is poised to revolutionize the construction industry, leading to more successful project completions. 

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Market Challenges

• The construction market faces various challenges in building frameworks and models for diverse projects, including housing, commercial buildings, and infrastructure. Securing permits and site preparation are initial hurdles. Excavation and framing follow, with the installation of utilities, interior and exterior work, and garden sheds. Projects like airports, dams, public facilities, and efficient infrastructure require specialized planning. Climate change and IT and telecommunications necessitate innovative technologies like 3D printing and sustainability regulations. Raw resources, such as clay, stone, timber, brick, concrete, metals, and plastics, must be sourced efficiently. Civil engineering projects like roads, bridges, and dams require skilled laborers and maintenance. Infrastructural properties like residential complexes, commercial complexes, and infrastructural properties offer diverse product offerings. Challenges include complying with climate change regulations, integrating smart cities, and catering to tourism, retail activities, economic development, and healthcare centers. Efficient infrastructure and cold storage solutions are essential for various industries.
• The global construction market encounters a substantial challenge due to the high expenses associated with acquiring construction machinery. This issue significantly affects project budgets, timelines, and overall profitability, making it a major concern for industry players. Machinery costs vary significantly based on equipment size and type. For instance, small excavators cost between USD100,000 and USD200,000, while medium-sized bulldozers range from USD200,000 to USD500,000. Large cranes, essential for heavy lifting and extensive projects, are priced between USD500,000 and USD1,000,000. Heavy-duty trucks, vital for transporting materials and equipment, cost between USD100,000 and USD500,000. Road graders, necessary for creating smooth surfaces, are approximately priced between USD150,000 and USD300,000. These machinery costs pose a considerable challenge to construction market profitability.

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Segment Overview 

This construction market report extensively covers market segmentation by

• Type
• Buildings Construction
• Heavy And Civil Engineering Construction
• Land Planning And Development
• Specialty Trade Contractors
• End-user
• Private Sector
• Public Sector
• Geography
• APAC
• Europe
• North America
• Middle East And Africa
• South America

1.1 Buildings construction-  The global construction market is divided into various sectors, with building construction being a major and continually evolving segment. This segment includes residential, commercial, and multifamily buildings, each contributing significantly to the market's expansion. For instance, in July 2022, Ivanhoe Cambridge and Hines formed a strategic joint venture to create, manage, and operate top-notch multifamily buildings in Sao Paulo, Brazil. With an investment capacity of approximately USD750 million in equity, this venture aims to deliver superior amenities and international-standard products and services, addressing a crucial need for purpose-built rental projects in the market. In October 2024, DLF, a renowned Indian real estate developer, introduced several new construction projects, illustrating the versatility of building construction. These projects consist of: 1. DLF Privana South Sector 77 Gurgaon: A residential project featuring modern designs and interiors, catering to the increasing demand for contemporary living spaces. 2. Lux5: Designed for the affluent market, this project boasts premium price points, underscoring the escalating preference for upscale residential properties. 3. DLF The Ultima: A commercial development in Gurgaon, recognized for its award-winning design and budget-friendly living options, highlighting the balance of aesthetic appeal and affordability in commercial construction. 4. DLF Gardencity Enclave Road: Currently under construction in Sector 93, Gurgaon, in 2023, this project further demonstrates the ongoing growth in residential construction. The building construction sector is fueled by factors such as urbanization, population growth, and the increasing requirement for modern infrastructure. Residential construction is particularly influenced by the burgeoning demand for housing, driven by demographic shifts and economic expansion. Multifamily buildings, like those developed by Ivanhoe Cambridge and Hines, cater to the growing trend of rental properties in urban areas, offering convenience and superior living standards.

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Research Analysis

The construction industry involves the building and creation of various structures, from houses and commercial buildings to infrastructure projects like roads, dams, and smart cities. The process begins with design and planning, securing necessary permissions, and site preparation. Raw resources, such as construction materials, play a crucial role in bringing the building project to life. The economy significantly impacts the industry, with fluctuations influencing the pace of construction activities. Infrastructure development is a major focus, including the creation of roads, bridges, and other essential infrastructure. Sustainability and worker safety regulations are increasingly important, driving the adoption of innovative technologies and eco-friendly construction materials. The industry caters to various sectors, including the hospitality, retail, and leisure sectors, and the demand for cold storage facilities continues to grow. Maintenance and upkeep are essential to ensure the longevity of structures and infrastructure.

Market Research Overview

The construction industry involves the building and infrastructure sector, encompassing a wide range of projects from residential houses to commercial buildings, roads, bridges, airports, dams, public facilities, and more. The process begins with planning and securing necessary permissions, followed by site preparation, excavation, framing, installing utilities, interior and exterior work, and maintenance. Raw resources such as clay, stone, timber, brick, concrete, metals, and plastics are transformed into structures through civil engineering and innovative technologies like 3D printing. Construction projects contribute significantly to economic development, providing employment opportunities for laborers and stimulating retail activities. Sustainability regulations and climate change concerns have led to the adoption of efficient infrastructure and innovative technologies. Infrastructural properties like dams and roads are essential for tourism and economic growth. The industry offers various product offerings, from housing complexes to commercial complexes, schools, healthcare centers, office spaces, and cold storage facilities. The construction market is diverse, with a focus on creating efficient, durable, and aesthetically pleasing structures that cater to the needs of society.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Buildings Construction
• Heavy And Civil Engineering Construction
• Land Planning And Development
• Specialty Trade Contractors
• End-user
• Private Sector
• Public Sector
• Geography
• APAC
• Europe
• North America
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio