The UK’s infrastructure growth is expected to rival China by 2030
The construction and insurance industry must work together to ensure changing risk profiles are managed appropriately, according to Marsh’s latest report
The report written in collaboration with Oxford Economics and Guy Carpenter – Future of Construction: A Global Forecast for Construction to 2030, cites that global construction output is expected to grow by 6.6% in 2021 and by 42% by 2030, driven by government stimuli and demand for residential construction.
Construction and the wider built environment accounts for around 40% of the world’s global greenhouse gas emissions currently.
The next decade could see global construction growth up by 35% compared to the previous decade, but this means greater risk of pollution and waste. Annual growth in UK infrastructure is expected to average 3.7% by 2030, rivalling China.
Lead author of the report, Graham Robinson, global infrastructure and construction lead at Oxford Economics said: “It is unusual to see construction outstripping growth in both services and manufacturing over a more sustained period. We would normally expect to see construction growing faster than other sectors of the economy for shorter periods in a cyclical upturn.”
Although he said “it’s not surprising” that construction is expected to power the global eonomy over the next decade.
The report offers a future view on the construction industry against the backdrop of the Covid-19 pandemic.
It said that climate change and the race to net zero are the greatest challenges that the construction industry faces and predicts the need to reduce carbon embedded in new construction driving growth of a deconstruction industry.
Richard Gurney, Marsh Specialty’s global head of construction said: “Climate change and the ESG [environmental, social, and governance] agenda – and the risks and opportunities they present – are among the biggest challenges the global construction industry faces over the next decade. These forces are changing risk profiles for the sector.
“Organisations must adapt in order to harness the sector’s massive potential for growth while playing a pivotal role in the advancement of economies and communities around the world.”
Simon Liley co-head, global engineering, at Guy Carpenter highlighted that these dynamics call for ”effective knowledge sharing from industry innovators” at one end all the way through to reinsurance actuaries at the other.
”Understanding the shifting profile of exposure, technology, and sources of capital will be important to enable insurers and reinsurers to establish underwriting platforms and offer products that meet the construction industry’s changing needs,” he said.