Although construction output in North America is forecast to grow 2.4% in 2022 and is expected to reach $1.94 trillion, up from $1.89 trillion in 2021, following interest rate hikes and rising material prices, the recovery is lower than expected, found GlobalData, a leading data and analytics company.
According to GlobalData’s report, ‘Construction Market Size, Trends and Growth Forecast by Key Regions and Countries, 2022-2026’, the 2022 forecast for North America has been cut from 4.5% down to 2.4%.
The considerable downward revision to the forecast was mainly owed to the lower-than-expected real output in the US in the first quarter of 2022, which registered a 6.6% Year-on-Year fall. The US construction industry contracted 1.0% in 2021 and 2.1% in 2022 and has suffered the effects of the poor macroeconomic environment far more than Canada, which is expected to retain much of the growth momentum from 2021 and is forecast to grow 4.0% in 2022.
Inflation has been rampant throughout the North America region, taking a high toll on its construction output with existing supply chain fragilities having been exacerbated by the advent of the war in Ukraine driving up material costs. As a result, the Consumer Price Index (CPI) in the US has risen 8.6% in the past 12 months as of May 2022, sitting at its highest level since 1981.