A boom in UK construction demand is expected by forecasters at accountants PricewaterhouseCoopers with energy and transport to be the hot spots over the next ten years.
The balance of global investment will shift towards the Asia-Pacific region, but UK energy and transport investment will still rise by 50% to over £100Bn in the next ten years according to the report from infrastructure and capital projects specialists at PwC. The research suggests that energy and transport will generate thousands of construction jobs between them over the years to 2025.
Spending on social infrastructure like schools, hospitals and further education will still account for over 25% of UK infrastructure and capital projects, says PwC, but energy and transport will be the growth sectors leading the construction industry, with transport investment doubling and energy almost tripling.
PwC says its research does not depend on having identified specific projects, but is based on analysis of key economic drivers such as economic growth assumptions. The report does not factor in any shale gas boom such as has boosted the United States energy market.
The report also says the forecasts do not depend on big projects like HS2 or Heathrow’s third runway going ahead. If HS2 does not go ahead then major upgrades will take place elsewhere on the rail network.
Even greater growth is expected for infrastructure investment and employment in other parts of the world, with a forecast of almost US$78 trillion annually to be invested globally by 2025. The UK market will grow by 3.8% a year over that period, but global growth will average 6% to 7%.
The Asia-Pacific region is forecast to account for some 60% of infrastructure and capital project spending by 2025, with China alone accounting for about a third of the global total. Emerging markets generally will see much faster growth in infrastructure spending than advanced economies, party because they were less badly enmeshed in the global financial system that went into crisis in 2007-2008.
The report, entitled ‘Capital project and infrastructure spending: Outlook to 2025’ predicts that the global capital project and infrastructure market is will be worth over $9 trillion per year by 2025.
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