CIC - Construction Intelligence Center

Globalization of Construction Contractors

  • Published:Wednesday, May 02, 2018


The reality of numerous multinational construction contractors winning business in overseas markets or acquiring foreign firms is evidence of the continued globalization of the construction industry.

There are many factors motivating the efforts by contractors to win business in foreign markets. Not only is there is a desire to gain a strategic foothold in new fast-growing markets, to diversify their workload and spread their risks, but contractors are also seeking to take advantage of opportunities to collaborate with or acquire innovative foreign contractors.

 

 

Based on an analysis of around 20,000 live projects in execution, it is evident that the North-East Asia region (which mainly comprises China, Japan and South Korea) is the most closed to foreign contractor activity. In that region, main contractors from other regions are involved in projects that have a value equivalent to just 5% of the total value of projects in execution. Conversely, the dominance of foreign contractors in projects in Sub-Saharan Africa is a reflection of both the rapid growth in the region and the limited capacity of domestic firms. In terms of the value of projects currently in execution, foreign contractors are involved in 74% of the total.

 

The report also features the results of a recent CIC survey on Globalization and Construction, providing an outlook on trends relating to globalization in construction based on responses from construction companies operating in all major regions throughout the world. When questioned on which markets outside of their home markets firms were looking to increase business, it was notable that respondents still appear to favor the larger, lower-risk markets in North America and Western Europe. A total of 48% of all respondents said they intended to increase their operations in North America and 44% in Western Europe.

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