Construction Sector in 2024: Challenges, Opportunities, and Trends for the Future
Key Ideas
  • Materials costs inflation has decreased, but challenges persist due to tight labor markets and limited specialist equipment.
  • Energy transition, including green hydrogen development, large-scale solar and wind projects, and advanced telecommunications infrastructure, presents opportunities.
  • Investment in social infrastructure remains strong globally, with a focus on the Middle East and Asia.
  • Volatility in the sector has led to opportunities for mergers and acquisitions, especially in renewables, transport, digital, and social infrastructure sub-sectors.
The construction sector in 2024 has faced challenges such as tight labor markets and limited availability of specialist equipment, despite the abatement of materials costs inflation. Insolvencies among sector participants remain high as increased costs cannot always be passed on, leading to a busy legal landscape with courts handling construction cases. In Hong Kong, key construction law cases have been summarized to provide insights into the industry. However, the energy transition presents bright spots with the development of large-scale solar and wind projects, green hydrogen market growth, and advanced telecommunications infrastructure. The demand for new technology like artificial intelligence and smart systems is driving the data centre market globally. Additionally, social infrastructure investment continues to be strong, although government investments have scaled back, paving the way for infrastructure funds to seek new opportunities. The Middle East and Asia show significant demand for social infrastructure due to population growth and increasing wealth. Saudi Arabia's modern arbitration rules position it as a country to watch in international arbitration. Lastly, the sector's volatility has created opportunities for mergers and acquisitions, particularly in renewables, transport, digital, and social infrastructure. Looking ahead to 2025, these trends are expected to continue shaping the construction sector.
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