Surprise opportunities

A new report by accountant BDO Stoy Hayward says the best construction opportunities in the world today are in the US, UK and Canada. It put these mature, in some cases declining economies, ahead of fast-growing emerging construction markets such as China, India and South Africa.

These findings are reported in the company's G20 Inbound Construction Opportunity Heatmap study, which ranks the 19 individual countries in the G20 group in terms of how ‘attractive' they are. This measure of market potential takes into account factors such as upcoming projects and the availability of funds for schemes as well as issues such as the ease of doing business, levels of corruption, the national tax regime and regulatory barriers.

On this basis, the top three markets were the US, UK and Canada. This is despite the fact that Us construction output is expected to fall -8.8% this year (according to Global Insight), while Euroconstruct predicts a -7.5% drop in UK activity. The prospects in Canada are better, with Global Insight forecasting a +1.8% rise in construction this year.

The study also ranks Japan highly, despite its falling construction output and notoriously impenetrable barriers to entry for foreign companies.

Commenting on these findings, Richard Kelly, head of construction at BDO Stoy Hayward said, "The idea that the UK and Canada could offer more potential than China, Saudi Arabia or even India is startling. It clearly demonstrates the importance of carrying out a rigorous analysis of opportunities and balancing them with the barriers to entry."

The report added, "It is easy to be dazzled by the size of the announced spend on construction, without considering all the other factors which make a destination country attractive.."

BDO Stoy Hayward's full ranking for the G20 countries is:

1. USA
2. UK
3. Canada
4. China
5. Japan
6. Saudi Arabia
7. Australia
8. India
9. South Africa
10. South Korea
11. France
12. Turkey
13. German
14. Indonesia
15. Italy
16. Russia
17. Brazil
18. Mexico
19. Argentina

(The G20 group is composed of these 19 countries plus the European Union as a whole).