The only thing that is certain is more uncertainty!

With the COVID-19 pandemic, the Suez Canal incident and the Russia-Ukraine war reshaping the global outlook, uncertainty appears to be the new normal. How does this impact construction and what is to come in 2023? We surveyed office leads and country directors from our 73 offices to find the view across six continents.

Most market forecasters are predicting that 2023 will see a weakening of the global economy. In 2022, energy and food price spikes — a consequence of Russia’s invasion of Ukraine — reignited the cost escalation seen as countries emerged from the COVID-19 pandemic.

Increased prices for materials and products led to over six in ten of our experts reporting tender prices rising by more than 10% compared to previous pricing. Issues were also noted with longer lead-in times and materials availability issues.

However, at the start of 2023, the mood is more optimistic for the avoidance of recessions predicted in major economies, with signs of inflationary pressures reducing. There are also bright spots in the global economy. Raw materials price increases are leading to growth forecasts for many Latin American countries. Asia is also tipped for strong economic performance, thanks to the easing of China’s ‘zero-COVID’ policy and India’s economy is booming thanks to digital, technology and energy investments.

Whilst governments are facing pressures from high inflation, the recent challenges have highlighted significant security risks and the dangers of overreliance on importing resources. As a result, investment is committed to improving energy security and supply.

The climate crisis and targets to reach net zero carbon by 2050 also require spending — a McKinsey & Company report found that capital spending on physical assets for energy and land-use systems during the transition will reach approximately $275 trillion. Changing demographics and needs will call for infrastructure investment. Overall, there is a strong pipeline of work for the global construction industry.

Whilst challenges remain, most of our local market specialists are optimistic for the year ahead, with many tender opportunities noted for data centres/mission critical, energy and infrastructure, logistics and warehouses, commercial offices and hospitality and leisure.

Of course, if we have learnt nothing else from the events of recent times, we know that the picture can quickly change. Whilst it will be another uncertain year for the global construction industry, it has shown its resilience over the last few years, with projects continuing to be built during challenging circumstances.

Understanding the local landscape is vital in navigating the changing environment. Productivity and careful resource use are increasingly important and the rise of digitalisation will help with the management and improvement of these.