Construction Bulletin: A roundup of recent global industry developments
Welcome to our final construction bulletin for 2024. It's been another challenging year for the construction sector. But there have also been some bright spots and some genuine opportunities for sector participants – especially in energy transition and giga projects.
Although materials costs inflation has generally abated, tight labour markets and the limited availability of specialist equipment continue to pose challenges across a wide range of projects. In turn, insolvencies remain high among sector participants as increased costs cannot always be passed on. This has had a knock-on effect with courts and arbitral institutions remaining busy with construction cases. The classic issues around cost, time and security of payment have continued to dominate the legal landscape. Our team in Hong Kong summarises the key construction cases of the year in Review of Key Construction Law Cases in 2024 – Hong Kong Perspective.
On a brighter note, the energy transition continues at pace – with the continued roll out of large-scale solar and wind projects, along with interconnector and transmission network development. The green hydrogen market continues to develop, although participants are grappling with the dynamics of an immature but developing market for hydrogen as an energy source. The demand for new technology (artificial intelligence, smart systems, greater connectivity) has kept the data centre market strong and supported the development of advanced telecommunications infrastructure across most parts of the world. You can read more about this in our report, Navigating Global Growth in Data Centres – Riding the AI Wave.
The strong investment in social infrastructure continues, although governments across the globe have scaled back their investments. Infrastructure funds are seeking out opportunities as the funding market reshapes itself off the back of COVID spending. Our report, Trends in Infrastructure – An evolving asset class produced in collaboration with Infralogic, surveyed senior executives who invest in infrastructure to capture the latest trends and investment strategies. The strong demand in the Middle East and Asia for social infrastructure as populations increase in size and wealth will continue to propel this part of the market. In Saudi Arabia and international arbitration - modern and ambitious, Suzannah Newboult and Payton Smith discuss the 2023 SCCA Rules, as Saudi Arabia positions itself as a country to watch.
Finally, the volatility across many parts of the sector has provided opportunities for mergers and acquisitions for infrastructure sector participants. Our Global Infrastructure M&A trends report focusses on the key sub-sectors of renewables, transport, digital infrastructure and social infrastructure.
As we close in on 2025 (happy 25th birthday to the Y2K bug) we expect many of these trends to continue.
