For most European economies we are forecasting what we have termed a “partial V” type recovery with annual GDP grow… https://t.co/enZKk5R0Dn
Global construction spending is expected to decline substantially in 2020
The novel coronavirus 2019 (Covid-19) crisis continues to be fast moving with impacts on the global economy becoming clearer as time passes. The Global Construction service, in this headline interim forecast, has downgraded the outlook across all markets, with world construction spending expected to fall by 3.2% in 2020. Commercial shutdowns, supply chain disruptions, labour shortages, declining oil prices, and the subsequent economic pains from these issues have all further weighed down on our forecast.
In Europe, the hardest hit nations in terms of number of infections and deaths are the UK, France, Italy, and Spain. While some construction sites remained open in Europe, work was slowed by a lack of equipment and supplies. Collapsing business sentiment, deteriorating profits, uncertainty over the demand outlook, heightened financial stress, and potential credit constraints all point to future weakness.
While infection rates have been relatively low in the Middle East and significantly lower across Africa, governments in the region proceeded to impose shutdowns and/or curfews to contain the virus. For the most part, construction sites have remained open, although reports of an outbreak in a major Egyptian project caused work on the new Capital City to be temporarily halted. More widely though, the impact of Covid-19 is felt through the fall of global energy prices. Many of the Middle East and Africa countries covered by the GCO service are oil exporting nations, currently experiencing sharp fall in the price of oil amid declining global demand caused by shutdowns elsewhere.
In the Asia-Pacific region, China makes up almost half of the regional construction market. Work resumption and heavy government investment as China emerges from the worst of the Covid-19 impacts means the region is set to report more moderate declines than the rest of the world. Some neighbouring countries, reliant on Chinese labour and capital for large projects could face disruptions to construction activity this year. Projects in Nepal, Bangladesh, and Indonesia have already faced delays caused by restrictions on mainland Chinese workers returning to these countries. Quarantine periods on arrival have also added to delays.
The global spread of the COVID-19 virus is generating unprecedented political-, security-, and economic-related challenges in Latin America. The region is being hit by a collapse of commodity prices, a fall in global demand, and rapidly depreciating currencies. In the context of fiscal constraints, these will be very difficult to address via countercyclical policies. Governments across the region are starting to take measures to help their respective economies, but Latin America's economic outlook is bleak.
North America is expected to have the largest spending decline among all regions. All three economies (United States, Canada, and Mexico) are highly dependent on each other, and will see large declines for the year as activity is restrained by deep recession in the US, and the uncertainty surrounding the reopening of economies. In the US, most states and localities in their respective shutdown orders have deemed construction an essential business, allowing projects to continue. Nonetheless, thousands of projects have been delayed.
Globally, lockdown restrictions are gradually starting to ease. Most governments have already made clear that construction and manufacturing will be prioritised in their work resumption plans. Construction activity is expected to pick up in the second half of the year as any backlogs caused by the shutdowns will support the sector, however, future investment is at risk as a result of the economic fallout of the pandemic.
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We expect India’s real GDP growth for (FY) 2020–21 will contract 6.3%, due to COVID-19 resulting in the first reces… https://t.co/hnPkdyrbaQ
We have revise up our US forecast for real GDP growth in 2020 from -6.1% to -4.8%. However, rising COVID-19 infecti… https://t.co/X9wKU6yhwA