The construction sector has been one of the main responsible for the economic reactivation of the Dominican Republic after the pandemic. According to data provided by the Central Bank, among the economic activities with the greatest expansion in the first half of 2021 was the construction sector with a growth of 36.5%, compared to 2020.
With this infrastructure boom, the construction industry must face the growing challenges regarding climate change and the race towards zero net greenhouse gas emissions according to a report published by Marsh and Guy Carpenter, both businesses of Marsh McLennan, the The world’s leading professional services firm in the areas of risk, strategy and people.
The report, The future of construction: a global forecast for construction until 2030 Written with Oxford Economics, a world leader in economic analysis and forecasting, offers a glimpse into the future of construction as the industry recovers from the unprecedented effects of COVID-19 and the key drivers that will shape its future over the next decade.
According to the report, global construction production is expected to grow by US $ trillion throughout the 2020s to reach US $ 15.2 trillion in 2030, driven largely by government stimulus and demand for residential construction. However, as the sector grows, so does the risk of increased contamination and waste, the document warns. Construction and the built environment in general currently account for around 40% of global greenhouse gas emissions.
The Climate change and the race to sustainability are arguably the biggest challenges facing the construction industry, according to the report. The need to radically reduce the amount of carbon incorporated in new construction will fuel the growth of a deconstruction industry that reuses huge urban stocks of building materials.
César A. Rodríguez, Senior Vice President of Consulting at Marsh Advisory for the Dominican Republic at Marsh Franco Acra, commented: “Climate change and the path to sustainability are among the greatest challenges facing the global construction industry over the next decade. These forces are changing the risk profiles of the sector. Organizations could adapt to take advantage of the industry’s enormous growth potential while playing a critical role in advancing economies and communities around the world. ”….
… ”On the other hand, the high and accelerated levels of public debt, as a result of the pandemic, will make it difficult for governments to finance the infrastructure projects that are required in each of their countries, for which the private sector and alliances between the public and private sectors will be key for access to the capital required for the development of strategic infrastructures in the countries in this decade ”.
Enrique Valdez, President and CEO of Marsh Franco Acra added: “The construction and engineering industry is entering a period of exciting opportunities, but also one that will require new ways of approaching risk from the insurance and reinsurance sectors. These dynamics require an effective exchange of knowledge from industry innovators at one end to reinsurance actuaries at the other. Understanding the changing profile of exposure, technology and sources of capital will be important to enable insurers and reinsurers to establish underwriting platforms and offer products that meet the changing needs of the construction industry.
Other projections for the industry through 2030 include:
- Projected average annual growth in construction of 3.6% per year, faster than the service or manufacturing sectors.
- The next decade for construction will see global growth of 35% compared to the previous decade.
- Global infrastructure construction is forecast to grow at an annual average of 5.1%.
