Euler Hermes analysts believe that, in lack of major infrastructure projects, the market trajectory is dictated by the private sector through the residential and office construction segments.
“Major signals, such as the occupancy rate and high yields compared with countries in the region, make us believe the office construction segment will remain an important pillar in 2019 too.”
Euler Hermes data show the market, overall, remains disconnected from the economic growth of the past years, which has been based mostly on consumption.
“Of course, the infrastructure sector could see a slight increase in 2019, because it is an election year. The lack of an investment strategy expressly assumed by the Executive, the current account deficit and political uncertainties maintain credit risks at a high level,” Euler Hermes analysts also said.
Euler Hermes expects the global construction sector to grow by 3.0% in 2019, after an increase of 3.5% in 2018 and of 2.7% in 2017.
“2018 saw the fastest growth rate throughout the current cycle in the construction globally (from 2008 to present) and faster than the global economy growth (of +3.2% estimated in 2018). However, 2019 could be a turning point for the global construction sector, which means from 2018 on, the increase will start to slow down gradually, in line with the global GDP growth”, analysts concluded.