The Construction Industry - Exactly How Healthy Is It?
In a day and age where the construction industry is plagued by cost overruns, site delays and cancelled projects, it's easy to see why people are afraid for its future. But this isn't just about building houses: construction underpin virtually every aspect of our society or economy. Plus, there are predictions of $5 trillion in new infrastructure spending over the next few decades.
Is the construction industry healthy? The answer isn't simple or clear-cut, but read on to learn more about what this sector really means for society.
The future of construction is bright.
To say the construction industry is booming may be an understatement. In fact, it hasn't seen this much growth since the post-World War II period. In 2012, global construction spending was $7 trillion, a 1.4% increase from 2011. And according to estimates, over the next 10 years we will need close to $43 trillion in infrastructure investment just to manage population growth and urbanization trends — not to mention all the other stuff we want and need like energy supply, new schools and better roads . If we can't manage that then things will be super-tough for all of us , including those contractors who'll be tasked with making it happen .
But as things stand, our future looks strong in the construction industry, with a World Economic Forum research report forecasting global construction investments to hit $11.5 trillion by 2020. And the thing is, this isn't just about building houses. Construction and infrastructure planning play a critical role in virtually every aspect of daily life and economy, including transportation, energy supply, facilities management and all services that support these activities.
So what's driving so much growth? The biggest factor is population growth as well as urbanization trends. For example, by 2025 India will have more than 5 cities with populations over 10 million units (about 80% of India's working population live in cities) . South Korea already has roughly half of its population living in cities, and China is only limited by its lack of space. And then there's Africa: the continent is home to six of the world's 10 fastest growing cities, as well as two megacities (cities with populations exceeding 10 million units), Lagos and Kinshasa . These trends are all increasing the demand for urban infrastructure investments, from transportation to energy supply to water and sewers.
At the same time, urbanization patterns are creating new issues that need to be overcome. For example, many parts of Indian cities are fast becoming crowded slums where people live in dire conditions without sufficient sanitation or a safe place to dispose wastewater. In many of these locations, poor waste management is causing serious issues of health and safety.
Over the past decade, the need to mitigate the impact of urbanization has helped push governments to move forward with construction projects that utilize low-cost green technologies to clean up the environment and provide sustainable development.
But there are signs that demand for these green technologies may be slowing down as urbanization trends slow down or even reverse. At this point, it looks more likely that countries will look inward in a search for solutions to mitigate water, air and soil pollution caused by rapid urban growth. This is especially important as many countries start investing heavily in infrastructure projects and face harsh weather conditions with frequent droughts or overuse of rivers.
Despite the potential slowdown, construction should continue to look forward. In fact, it's expected to be among the strongest overall industries for growth over the next decade. And projects in infrastructure are one of the most efficient ways to meet these growing needs for affordable housing, urban development and all forms of infrastructure.
Image Credit: "Construction" by Phil Roeder via Flickr Creative Commons
For more information about construction and global development trends, as well as how The London School of Economics has selected 20 key themes that will define tomorrow's economy check out our new ebook: The Global Construction Industry Report 2015 .
All Posts in This Series:
The Construction Industry - What Happens After the Project?
The Construction Industry - How Healthy Is It?
The Construction Industry - Exactly How Healthy Is It?
Posted by London School of Economics at 6:09 PM 7 comments Links to this post
At the beginning of the year we took a look at the chemicals we use everyday. Now, it's time to take a more broad based look at chemicals... and there are about 40,000 different ones . At current consumption levels, if each one was labeled and properly disposed, the average person would have to travel roughly 53700 miles (7440 km) just to dispose of them all. Making things worse, the U.S. environmental protection agency estimates that we dispose of roughly 100 million pounds of hazardous waste each year . If you just consider the amount of chemicals we use each day , this could fill up a waterbed in real time -- and we may be on the cusp of a new era where everything from electronics to cars needs to be more environmentally friendly .
So what's the current answer? Most companies have developed recycling systems which take used chemicals and turn them back into goods. These good end up across many different channels, including third party recyclers who sort out what's worth salvaging and then incinerate those chemicals for energy. However, these recycling systems are incomplete. Companies don't recycle everything but only 80% of the plastics we manufacture in the U.S., and there's still a lot of toxic chemical waste created during the production process .
So where's the solution? A few years ago, plastic bottles began to gain popularity as an alternative to glass or metal bottles. While they're not as pretty as other options, they are more durable and can be made cheaply from materials common in today's world. The increased manufacturing of these products has made them a more ubiquitous part of daily life. But there are some big challenges ahead too. For one, recycling and repurposing is not a scalable solution. And even if it was, it would take years to fully develop new products that could replace the bottle in use today .
So what's the plan? The most obvious solution would be to make the transition to not using plastic bottles at all. And while this might sound easy, in many parts of the world it simply isn't possible. Plastic bottles have mass appeal and are currently being used by millions of people who can't afford another option .
Conclusion
The fact is that plastic pollution is a big problem, but it's not going away any time soon. We're using more and more different types of plastics -- and we continue to find new ways to use it. However, all of these uses put the material under pressure, which can cause the plastic to degrade over time into small fragments that can break down further into microplastics and eventually reach the ocean . These fragments are killing off marine life, from plankton to whales .
Meanwhile, landfills are filling up with bottles . Around 6 million pounds of PET is collected for recycling each year in the U.S., and about 2 billion pounds of PET bottles are sold per year.