Covid-19 briefing

Download GlobalData’s Covid-19 Executive Briefing report

- ECONOMIC IMPACT -

Latest update: 20 January

World Bank forecasts global economic growth at 4% in 2021 as vaccine rollout becomes widespread, following an estimated 4.3% contraction in 2020.

Chinese economy expands by 6.5% in Q4 2020, taking the full year growth to 2.3% in 2020, according to National Bureau of Statistics.

-3.7%

Consensus forecast for world GDP growth in 2020

6.7%

Unemployment rate in the US in December 2020, unchanged from the previous month

Global real GDP growth

% change on previous year

2.6%

-3.7%

5.4%

Pre-Covid-19 2020 forecast

Adjusted 2020 forecast

2021 consensus forecast

The cost of Covid-19

$375bn

Estimated monthly cost of the Covid-19 pandemic globally

$11tn

Cumulative loss for the global economy over the next two years

- SECTOR IMPACT: CONSTRUCTION

Latest update: 8 January

output predictions

The construction industry recovered in most major markets in the second half of 2020 having suffered record declines in the first half amid the restrictions on activity imposed to contain the spread of Covid-19 infections.

4.5%

GlobalData expects that global construction output will expand by 4.5% in 2021 following the estimated contraction of 2.9% in 2020.

There are short-term challenges to getting back to a normal level of activity, not least those related to making sites Covid-19 secure and adhering to local regulations, notably social distancing rules and self-quarantining of workers. However, with the distribution of vaccines on the horizon, the risk of severe disruption has diminished.

Supply chain and demand disruption

The construction industry will be heavily affected by the economic downturn in major markets, with planned projects at a high risk of being delayed or cancelled.

In the short term, there is a continued risk of projects in execution being halted because of new lockdowns, a lack of materials, and other supply chain disruption.

Construction sub-sector impact

Commercial construction is likely to be the hardest hit in 2020 with sectors such as retail, leisure and hospitality already suffering from the decline in trade, travel and consumer and business confidence.

The residential sector will struggle as unemployment rises, despite low interest rates and direct government support. There is a high risk that a considerable proportion of early-stage projects in the sector will be cancelled or delayed.

The industrial construction sector is most at risk from the severe drop in economic activity. Immediate priorities for manufacturers will be to stay afloat and rebuild core operations, rather than invest in new premises or capacity.

Infrastructure projects will be a priority for government investment as soon as normality returns, to reinvigorate the industry. With interest rates at record lows, borrowing costs will be at a minimum, but success will depend in part on the financial standing of governments post-Covid-19.

Governments across the world are preparing to fight the virus outbreak by strengthening their healthcare infrastructure, and building of new hospitals is rising sharply. This investment helping to support the expansion of institutional buildings.

03/03/2021 09:44:16