Economic Analysis


Central & Eastern Europe
Latin America
Mid-East & Turkey
Northern America
Western Europe
Change sector


  • Permanent inward migration and world population growth
  • Persistent increase in urbanization
  • High interest in green projects, 3D printing technology and urban mining
  • Overall accommodative monetary policies worldwide and low interest rates in advanced economies


  • The level of indebtedness of construction companies remains high, particularly in China
  • High household debt at the global level
  • Vulnerable to supply chain disruptions and labour shortages
  • Pro-cyclical sector, some segments of which are durably impacted by the consequences of the COVID-19 health crisis

Risk Analysis

Risk Assessment

The construction sector will remain resilient and continue to grow in 2022. We expect a relatively less volatile macroeconomic climate driven by progress in vaccination rollout and limited stringent restrictions and lockdowns in many countries, but the ongoing presence of COVID-19 variants remains. Coface expects a global GDP growth forecast of 4.1% this year. The dynamics of the crisis and the impact on the recovery will be different depending on the segments of the construction industry, despite the pro-cyclical nature of the sector. Economic activity continues to pick up at the global level, partly thanks to government support and accommodative monetary policies. In 2022, we might experience a rise in mortgage rates, which will affect affordability   across several countries. In this context, some sub-segments of the construction sector should be more resilient than others. This is the case of infrastructure, for which projects play a key role in government stimulus packages. The majority of these packages are part of governments’ continued effort to 'decarbonize' the economy in order to address environmental challenges. Moreover, to a lesser extent, private housing is expected to remain robust, despite still the high level of household indebtedness globally and economic uncertainties such as supply chain disruptions and labour shortages. By contrast, the commercial real estate segment outlook worldwide is less optimistic overall in the medium-term. Demand is expected to remain limited despite the economic recovery expected this year, since the mobility crisis triggered by the pandemic has led several enterprises both in different industries and regions of the world to sustainably modify their work organization with the general increase in teleworking. This working pattern continues to be encouraged in 2022 in many markets. 


Sector Economic Insights
Private housing remains robust in 2022, while the commercial real estate segment continues to be less favourable  

According to the Institute of International Finance (IIF), the worldwide household debt rose by USD 1.5 trillion in the first six months of 2021 to USD 55 trillion, which has been in line with rising house prices in almost every major economy. Supply will fail to offset demand, which should continue to encourage home prices growth.


Household demand for private housing will still remain stronger in 2022. In this sense, there are factors that could support household demand for private housing. First, the low level of interest rates in leading economies. An upcoming increase in mortgage rates will drive to limited affordability for economic agents, a slower housing price growth and tighter financing conditions. Second, the growing aspiration of part of the urban population to organize their lifestyle differently in the wake of the generalized and accelerated increase in teleworking after several episodes of lockdowns. In 2022, the remote-working system continues to be encouraged and changes in consumer behaviour for urban area vs. suburban will support housing demand. Moreover, permanent inward migration will contribute to the rise in dwelling demand.


At the time of writing, building permits in the U.S. and Europe have slightly increased and Chinese housing prices experienced a moderate decrease. We expect slowing growth in building permits and house prices in major economies. However, the construction sector will face several difficulties in terms of supply chain disruptions. The increased demand for some building materials such as cement, chemicals and metals, the availability of some inputs such as windows and electric breaker boxes, and labour shortages, will all weigh on the supply side and several construction projects might be delayed. Prices for cement, PVC, aluminium and copper are expected to remain high in 2022. Moreover, the time required to plan processes and land availability across several countries will affect the sector. We consider small enterprises within this sector to be more affected due to the inputs costs. The commercial real estate segment will remain affected by the pandemic and is expected to gradually recover in the near-term. As teleworking is still in place and encouraged across many countries, people will not return at 100% to their office in 2022.


Resilience of the infrastructure segment 

Governments consider the construction industry as key to economic recovery and a source of jobs. Infrastructure activity will support the sector’s growth, as government stimulus will remain important in 2022.  The U.S. Bipartisan Infrastructure Bill authorizes about USD 550 billion in new spending and extends several federal infrastructure-funding programs. Most of the funds will support transport infrastructure such as roads, bridges, ports, rail, public transit, and the remaining funds will go towards upgrading utilities such as water, power and digital infrastructure. The impact might not be felt immediately because it might take a few quarters to start executing the spending, which will be spread out over 8-10 years. The bill does not address building construction, but the trajectory of the residential segment depends more on private investment.  In Europe, the EUR 723 billion Recovery and Resilience Facility (RRF), which represents a major component of the NextGenerationEU fund, will support the construction industry. Green investments, digital transition, energy efficiency of building construction, establishment renovation and low-carbon transport will be encouraged.  The Chinese construction sector’s activity could be restrained by woes in the real estate sector. This segment is highly indebted and faces defaults as developers suffer from a lack of cash. However, the authorities will support the property market for reasonable housing demand and adopt city-specific policies, which might loosen the property market measures - especially on financing - in 2022. Furthermore, we expect robust fiscal spending, including infrastructure spending next year.


The major transformations underway in the sector before the crisis, particularly in response to environmental issues, should continue

For several years now, construction sector players have been engaged in a decarbonized approach, in order to respond to the willingness of consumers and public authorities to prevent environmental risks and fight climate change. For instance, the European Union (EU) has committed to achieve "carbon neutrality" for new constructions by 2050 and to reduce carbon emissions in the sector by 40% by 2030. The European Green New Deal Investment Plan provides a framework for investment in green infrastructure. This will lead to investments in low-carbon transport infrastructure (high-speed rail, public transport, electricity-recharging infrastructure), and the health crisis should not alter this approach. Moreover, with the allocation of EUR 49.1 billion to the EU's 2021 "natural resources and environment" budget, the deployment of renewable energies should also benefit the construction sector. Furthermore, in 2012, the Australian government created the Australian Renewable Energy Agency (ARENA), that has committed to 543 projects, for a total investment of USD 1.6 billion. In Latin America, where 80% of the population is urban, the de-carbonization of buildings represents a market worth nearly USD 4 trillion by 2030, according to the World Bank.

Climate change, energy efficiency and transition to green building materials (urban mining) represent important elements, as authorities will race for reduction in greenhouse gas emissions. Modern techniques of construction such as 3D printing technologies will become a new norm and reshape construction productivity during the next period.




Last update : June 2023

  • Czech
  • English