The world’s 100 largest construction companies generated revenues of more than US$1.997 trillion in 2023, an increase of 3.4% over the prior year, with over half of those revenues originating from companies based in China, according to Deloitte’s seventh annual Global Powers of Construction (GPoC) report.
The report analyzes the worldwide construction industry and examines the strategies and performance of the top listed construction companies in 2023. To be included in the Top 100 list, companies must be publicly traded with a significant portion of their revenue arising from building and civil works.
“The construction industry is still coping with the lingering impacts of the COVID-19 pandemic—including commodity pricing surges, supply chain disruptions, and exchange rate fluctuations—and growth is expected to be sluggish in 2024, especially in advanced economies,” says Javier Parada, Deloitte Global Engineering & Construction leader. “However, there should be a steady growth trajectory through 2030 with opportunities emerging as the global infrastructure gap caused by population growth, urbanization, digital transformation, and decarbonization is addressed.”
Many companies are mitigating risk through increased diversification and internationalization, with 25% of the 2023 revenue of the Top 100 companies generated by non-construction activities and 18% from international activities. Diversification, such as real estate, services, and concessions, provides more predictable revenues and higher operating margins than construction activities. Internationalization reduces dependency on local markets and provides access to high-growth regions, although this comes with challenges in the form of different regulatory frameworks and business models.
Modest growth across geographies
Despite the lingering effects of the pandemic and geopolitical tensions, modest growth is still predicted for most geographies.
- North America: US-based companies saw an astounding 50.1% increase in market capitalization in 2023, with sales accounting for approximately 8.3% of global revenue. US government initiatives will drive substantial investments in transportation infrastructure and utilities as well as technology manufacturing construction. Moderate growth is expected across 2024 and 2025 for both the United States and Canada.
- Latin America and the Caribbean: Brazil led infrastructure investment, while Mexico focused heavily on energy and transportation. The region should see moderate growth over the next few years as long as it manages economic uncertainties and public debt.
- Asia: Chinese-based companies represent 53.5% of 2023 revenue, with 8 of the top 10 construction companies based there. Combined with Japan—where plans for transportation, energy, and urban development are extensive—at 9% of total sales and South Korea at 5%, Asia is the dominant region by revenue. India’s construction industry is also seeing notable growth due to infrastructure development, increased foreign investment, and rapid urbanization. In recent years, Chinese-based companies have increased their international presence, mainly in African, Middle Eastern, South Asian, and Latin American markets.
- Europe: Led by France and Spain, Europe has 40 groups in the Top 100 in 2023, accounting for approximately 21% of global revenue, with an 11.3% increase in sales and 25.2% increase in market capitalization over the previous year. The region should see moderate growth over the next two years as long as it overcomes geopolitical tensions and the lingering effects of past monetary policy tightening. European-based companies continue to be the most internationalized with 63% of their sales obtained outside their domestic markets, compared to 11% for Asian-based companies and 9% for US-based companies. Additionally, 43% of European-based companies’ revenue comes from non-construction activities, compared to 27% for Asian-based companies and 14% for US-based companies.
- Oceania: Australia construction is expected to grow by nearly 3% through 2028, driven by significant investments in energy and utility projects, transportation, and health care. Population growth in major cities will also fuel residential construction.
- Middle East and North Africa: While construction growth has likely accelerated due to easing inflation and the stabilization of commodity prices, geopolitical tensions and conflicts in Gaza and Sudan continue to impact the industry. Saudi Arabia is the leading investor in infrastructure, driven by its Vision 2030 initiative.
Decarbonization of the industry
With construction accounting for 37% of global CO2 emissions, the Paris Agreement calls for the industry to halve its emissions by 2030 and achieve net-zero across new initiatives and existing assets by 2050. This poses significant challenges since the industry relies heavily on high-carbon processes throughout the value chain. The report examines how the move toward decarbonization will likely impact the global industry, including:
- Technological adaptation: The industry is embracing a range of new environmentally sustainable technologies aimed at promoting sustainability.
- Workforce changes: There appears to be a growing need for skills related to sustainable construction, with training programs increasingly offered by industry associations and other institutions.
- Industry fragmentation: Because of the number of mutually dependent stakeholders across the value chain, any one of them could hinder decarbonization. In response, collaborative contracts can establish shared sustainability goals.
- Financing: New green projects can prompt new financial instruments involving a mix of government support, private investment, tax incentives, innovative partnership models, and policy initiatives.
- Data collection and benchmarking: Developing consistent definitions, methodologies, and tools to monitor carbon footprints can help the industry make more informed decisions on environmental impact.
Despite challenges, the Global Powers of Construction analysis reveals strong opportunities for construction companies in the form of portfolio diversification, international sales, and widespread investments in infrastructure, energy, transportation, and urban development.
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