RICS global construction monitor results Q3 2024: Activity growth slowing but remains positive

The Construction Sentiment Index for Q3 2024 indicates an easing in activity growth, while trends at sector level are more divergent.

Showing the least positive reading in just under two years, the Q3 results point to a possible slowdown in construction activity growth across most world regions.

Nevertheless, the Construction Sentiment Index remains mostly in the positive, with strong sentiment still seen across some countries. At the aggregate level, respondents report an easing in cost-inflation and improved credit conditions, which should bode well for the future.

Country- and sector-level data shows a divergence in sentiment. Professionals working in Middle East and Africa (MEA) are seeing the strongest momentum behind growth in construction activity. This is led by responses from Saudi and Arabia and the UAE, where robust growth in workloads has been reported across all sectors. At the other end of the spectrum, China and Hong are where market confidence has become the most subdued, pushing the reading for the Asia Pacific region into negative territory for the first time in two years.

While the 12-month outlook for infrastructure workloads remains the most consistently strong across global regions, expectations for housing development activity have been scaled back in the Americas and APAC. Meanwhile, in Europe, it is non-residential or commercial workloads that construction professionals report the most caution about over the next 12 months.

Looking at barriers to construction activity growth across sectors, financial constraints were reported as the most common cause for slowing activity, and insufficient demand the second. However, respondents reported a noticeable easing in credit conditions during Q3, and the number of respondents reporting material costs as a restrictive factor is at its lowest in four years. Professionals responding to the survey also scaled back their expectations for material cost inflation over the next 12 months, with the figure the least elevated since 2020.

RICS’ Global Construction Monitor is a quarterly guide to the trends in the construction and infrastructure markets. The report is published alongside other RICS surveys covering the housing market, residential lettings, commercial property, construction activity and the facilities management market.

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