According to the report shared by Global Data, the growth rate for the construction industry in 2019 was set at 2.6%. Previously, releasing a report before March arrived, Global Data predicted a more positive growth rate for the industry o9f construction. However, with recession potentially crippling its way into the industry and challenges such as shortages in labor and the rising prices for construction materials, the growth rate for the construction industry might be lower than it was originally expected.
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Construction Industry Growth Rate to Fall Short Before a Rebound
With the rising unemployment rates, the shortage in labor, materials for the construction getting more expensive, and supply chain suffering in the course of the last two months, it appears that the growth rate for construction would drop to 2% in 2020 from 2.6% as recorded back in 2019. The prediction in the first quarter of the year for 2020 was positive although predicting a growth rate increase by “only” 0.5%. However, with the latest changes in the global economy, it is almost certain that the construction industry will fall short before taking a rebound as predicted for the beginning of 2021 when the supposed recovery should take place. In case the second half of the year brings more positive changes in the form of rising construction projects, the industry could rebound even sooner with the predicted growth rate of 5%. A 5% growth would be more than a positive change for the industry.
Private Investments Halting in the Sector of Constructions
Private investors are pulling back at an increased rate due to the pending financial uncertainties, which is one of the main reasons why construction is suffering in terms of a potential drop in the growth rate. The construction industry is not the only sector suffering from this case scenario, as private investments are lacking across a wide range of industries.
