New figures released by GlobalData show that the construction project pipeline in China is healthier than that of any other world region, while in Latin America the industry is struggling to meet deadlines.
China has a score of 0.99 in GlobalData’s January 2022 Construction Project Momentum Index, which provides an assessment of the health of the construction project pipeline at all stages of development from announcement through to completion.
Every construction project in GlobalData's database is assigned a score of between 5 and -5 based on its current progress, a score that is continually updated over time. These are then weighted by the value of each project in order to arrive at overall scores for countries, regions and sectors.
Within China, the energy and utilities sector has performed particularly well, with a score of 1.09, ranking second out of all 11 regions.
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By contrast, the region's residential sector has performed less well, ranking 11th with a score of 0.25.
Which regions are struggling?
While the construction sector in China may be thriving, in Latin America the situation is less positive. The region has a score of just 0.13 in GlobalData's Construction Project Momentum Index, indicating frequent project delays and cancellations.
The situation is particularly severe in Argentina, which scores just -0.22 on the index. Brazil (0.03) also scores poorly. The situation is somewhat better in Mexico, the best-performing country in Latin America with a score of 0.47.
Looking at construction projects by industry, Latin America's difficulties are greatest in the energy and utilities sector, which scores just 0.11 on the index. That puts Latin America in last place out of the 11 regions in terms of the health of its energy and utilities sector construction projects. The residential sector performs somewhat better (0.27).
How are different sectors performing worldwide?
GlobalData's analysis examined construction projects in six sectors around the world: energy and utilities, commercial and leisure, industrial, institutional, residential and infrastructure.
For construction projects in the energy and utilities sector, the Middle East and North Africa (MENA) is seeing the healthiest performance with a score of 1.21 on GlobalData's Construction Project Momentum Index. As noted above, Latin America has the worst score for projects in this sector.
Looking at projects in the industrial sector, China is the best-performing region with a score of 1.06, whereas sub-Saharan Africa is the worst-performing with a score of -0.06.
Investors looking to avoid delays and cancellations while constructing residential buildings should be looking to eastern Europe, which comes out top on the Construction Project Momentum Index in this sector with a score of 1.2, while steering clear of China (0.25).
Infrastructure projects, meanwhile, have been running most smoothly in Australasia (1.25), while meeting the greatest friction in Latin America (0.18).
In the commercial and leisure business, construction projects are currently seeing fewest delays in the MENA region (0.91), and the most delays in sub-Saharan Africa (-0.16).
GlobalData also examined the progression of construction projects in the institutional sector, finding that they were proceeding most successfully in China (one) and least successfully in Latin America (0.25).
The Construction Project Momentum Index
GlobalData's Construction Project Momentum Index is based on analysis of thousands of individual construction projects around the world.
Each project is continually monitored for updates, with updates indicating progress increasing the project's score, while updates indicating delays or cancellations reduce the score. The score always sits between 5, the best possible score, and -5, the worst.
The scores for individual projects are then weighted based on their significance in order to create combined indices for each region or sector.
Events that can reduce a project's score include the project being cancelled or put on hold, delays, the rejection of applications or tender bids, or the reduction of the project's scope.
Events that can increase a project's score on the index, by contrast, include the completion or commencement of construction, the awarding of major contracts, or the approval of applications.
As well as a global overview of the Construction Project Momentum Index, Investment Monitor has broken down our coverage on a regional basis:
- Eastern Europe
- Latin America
- Middle East and North Africa
- North America
- North-east Asia
- South Asia
- South East Asia
- Sub-Saharan Africa
- Western Europe