Emerging Strength

According to a report published earlier this year, construction will outpace world GDP growth in the next decade, and this resumption of growth will be marked by an acceleration of changes that were happening prior to the financial crisis. Gemma Carter looks at where and how this growth will be generated, and to what extent it will be influenced by environmental, financial and social issues.

On 23rd August 2002, the South-to-North Water Diversion Project was approved by China’s State Council, indicating the commencement of a 48-year-long project that is expected to cost more than US$62 billion and will require the relocation of at least 300,000 people. The project, which involves drawing water from southern rivers and supplying it to the arid north, is the largest of its kind ever to be undertaken, but it is just one of several mega projects in the country, which is pledging billions to build the world’s largest dams, highways, bridges, railways and energy projects.

Indeed, the construction boom taking place in China serves as a metaphor for the country’s rapid economic development, and for the gradual shift in money and power from the traditionally dominant nations to a new crop of emerging economies. Last year, as Western Europe, Japan and the US struggled to return to growth after the worst recession since the Second World War, China poured over US$1 trillion into new building projects – more than any other nation. Moreover, a report published in March 2011 by Global Construction Perspectives, together with Oxford Economics and Pricewaterhouse Coopers, predicts that the gap is set to widen further, with China accounting for 20 percent of the world’s building industry by 2020.

The rapid growth in China’s construction market is expected to be complemented, however, by increased spending in other Asian countries, such as India and Indonesia, as well as in Canada, Russia and Australia. The report, entitled ‘Global Construction 2020’, forecasts that global construction will rise by 67 percent from US$7.2 trillion today to US$12 trillion in 2020, with a continuing shift towards Asia and other emerging markets where rising populations, rapid urbanisation and strong economic growth are drivers for construction.**

Relentless growth

The idea of transferring water from the Yangtze River to northern China was first conceived in the early 1950s by the late Chairman Mao Zedong, as a means of alleviating the growing water shortages in the rapidly industrialising cities of Beijing and Tianjin, and the northern provinces of Hebei, Henan and Shandong. Like China’s other well-known mega project, the Three Gorges Dam, the scheme has aroused concerns with regard to the destruction of grassland and the displacement of people, and plans for further industrialisation along the routes of the project are likely to severely pollute the diverted water.

Yet such projects are a requisite for China’s continued industrialisation and economic growth, as well as its urbanisation. Beijing, the country’s capital and second-largest city, recorded a population of 19.6 million in 2010 – an increase of more than six million people in 10 years, due in part to the fact that the city attracts hundreds of thousands of migrants from rural communities of western and central China every year. In addition, millions of tourists and business travellers are now flocking to Beijing, to the extent that the huge third terminal at Beijing Capital International Airport – which opened four years ago and has more floor space than all five Heathrow terminals combined – is apparently running out of capacity. The airport has an annual capacity of 75 million passengers, and handled 73.9 million last year. By 2015, however, this is expected to surge to 90 million.

In response, the government has announced plans to build a third airport for Beijing that could have as many as nine runways, eventually serving between 120 and 200 million passengers per year. The new airport, which is due to be built on a 54 square-kilometre site to the south of the city, will serve Beijing, Tianjin and parts of Hebei province, and discussions are already underway to provide the airport with high-speed rail links to downtown Beijing, as well as Tianjin, Shenyang, Shijiazhuang and Shanghai.

Home cheap home

While China is likely to remain the world’s largest construction market in the decade to 2020, Global Construction 2020 suggests that growth in the country’s residential construction sector will fall to under half the levels seen in recent years, as the government attempts to stave off a property bubble. Instead, the most promising market for residential construction is India – the country has an annual need for 8 to 10 million houses, which is a huge number in a rapidly developing economic giant that has more than 1.2 billion inhabitants. Moreover, more than 93 million of these people live in slums, according to a report issued by the Government of India’s Committee on Slum Statistics/Census in September 2010.

On 2nd June 2011, the Union Cabinet approved the launch of the ambitious Rajiv Awas Yojana scheme, under which the government intends to construct around 10 million houses as part of its plan to make India slum-free by 2014. The first phase of this project, which will be undertaken over two years, has a budget of INR 50 billion (US$1 billion) for the creation of affordable housing stock, but private investment is also being sought, and many local companies are gearing up to build these units. Holland India Housing (HIH), for example, is a Dutch-Indian initiative that develops and builds pre-fabricated houses, schools and offices in a factory, rolling one concrete house off the assembly line every 2.4 hours.

In July this year, Tata, the Indian company known for launching the world’s cheapest car, unveiled a flat-pack house that costs just INR 32,000 (US$645) and can be built in a week. The basic model of a so-called ‘Nano’ house, which will use coconut fibre or jute for wall cladding and interiors, will be a 20 square-metre home with a life expectancy of 20 years, and will also be available in a 30 square-metre version and with additional features, such as a solar panel for the roof and a veranda.

Preparing for the worst

Meeting the need for affordable housing is a burning issue worldwide, especially in developing countries. According to the UN, there are 1.6 billion people living in substandard housing and 100 million homeless across the globe, and, during the next 30 years, the number of people residing in slums will increase to nearly two billion unless action is taken. One company from the US that is trying to make a difference is Monolithic, whose patented ‘Dome’ buildings aim to combine cost control with superior strength and energy efficiency. In 2005, the company set up a non-profit organisation called Domes for the World (DFTW), which works with other NGOs to build housing in impoverished communities, and has completed projects in Indonesia, Haiti, Ethiopia, India and Belize. DFTW constructs simple, thin-shell concrete Domes called ‘EcoShells’, which are built to last over 500 years and to withstand even the most severe hurricanes, tornadoes and earthquakes. Indeed, in the light of recent natural disasters – from the tragic earthquake that struck Haiti in 2010 to the devastating earthquake in Christchurch, New Zealand in February this year – as well as acts of terrorism, engineering buildings that are better able to endure such calamities is essential.

While Japan has long been known for having some of the world’s leading earthquake engineers – over 90 percent of the people confirmed dead in the earthquake and tsunami catastrophe that hit the country in March died from drowning, rather than from being crushed by collapsing buildings – the Japanese firm TIS & Partners has turned its attention towards the aftermath of disasters. The structural engineering company has announced a new type of material that could revolutionise post-disaster rebuilding, having discovered that by blowing CO2 into silica, they could make a structure that is as hard as a brick, in the shape of a brick, in under a minute. Then, to make it stronger, they added organic material – such as an epoxy or urethane – and found that it had at least 2.5 times the tensile strength. This new material, which can be easily shaped and requires little to no metal support, could provide a way of quickly repairing damaged buildings before they fall, and of building strong shelters.

Other developments in the construction materials sector include the increasingly prominent role being played by nanotechnology applications, as reported in Euroasia Construction earlier this year. While nanomaterials – including coatings to create self-cleaning and heat-regulating windows – are already in use in several construction applications, nanotechnology research is also developing many other game-changing products, such as light composite materials for load-bearing applications. Acciona Infrastructures, a forerunner in the sector of nanotechnology-based composite materials, is working on the EU-financed POCO project, which is using carbon nanotubes to create innovative polymer composites with tailor-made properties. The Madrid-based company is also collaborating with Dura Vermeer on the EUREKA FLOATEC project, wherein it is applying its expertise to find a new way to build floating structures in the Netherlands – a country that is significantly more advanced than others in its adjustment to the effects of global warming, and especially rising sea levels.

More than Masdar

As the Netherlands finds ways to adapt to the consequences of climate change, the primary concern in the global construction industry is on reducing the sector’s impact on the environment through green building and sustainable technologies. At this September’s International Green Building Conference (IGBC) in Singapore, an official from the UN Environment Programme (UNEP) told participants that the construction sector is in a unique position to help create a global green economy. Given that the construction industry accounts for roughly a third of greenhouse gas emissions, and the world’s existing buildings consume 60 percent of electricity produced globally, there is a great deal of work to be done.

Since the initiation of the Masdar City project in Abu Dhabi, proposed to be the world’s first zero-carbon city, numerous ‘eco-cities’ have been announced in locations all over the world, including Sino-Singapore Tianjin Eco-City, a collaboration between the governments of China and Singapore. When it is completed in 2020, 350,000 residents will live with green transport and architecture, energy from solar and wind power, rainwater recycling and seawater desalination facilities. Singapore’s support will surely be extremely beneficial to the development of the project – the city-state has set itself the target of greening 80 percent of its building stock by 2030, and its Building and Construction Authority (BCA) has trained some 3,200 workers to date in sustainable design and construction. Projects to retrofit existing towns and cities, on the other hand, have become equally as prevalent, with many governments trying to emulate the success of Portland, Oregon, the first US city to enact a plan to cut CO2 emissions. The leaders in this domain include Malmö in Sweden, Copenhagen in Denmark, Loja in Ecuador, Curitiba in Brazil and Iceland’s capital, Reykjavik.

Coupled with a focus on sustainability is a growing trend towards projects aimed at improving infrastructure and strengthening inter-border trade links. The six Gulf states have US$106.2 billion worth of railway projects in various stages of planning and construction, while Turkey is planning a third bridge linking Asia to Europe over the Bosporus, as part of the US$6.5 billion Northern Marmara Highway Project. In fact, Global Construction 2020 expects Turkey’s increased investment in infrastructure ahead of potential EU membership to boost its construction output sharply, making the country a construction powerhouse in Eastern Europe, together with Russia, as it prepares to host the 2014 Winter Olympics and the 2018 FIFA World Cup. Indeed, as economies such as Western Europe and the US face the prospect of a double-dip recession, the ability of emerging markets to outpace developed countries seems stronger than ever.