John Butler Managing Director - APAC and GCC
Macroeconomic stability, strong construction pipeline, and an evolving commodity landscape position APAC and GCC for continued growth, albeit with risks from tariffs, labour constraints, and global demand uncertainty.
Construction markets across APAC and GCC in 2026 will continue to navigate a complex landscape shaped by macroeconomic pressures, supply chain instability and commodity price fluctuations. Growth opportunities are strong across the region, however risks remain elevated.
The APAC and GCC regions demonstrated resilience in 2025 despite global trade tensions and tariff pressures. The IMF revised APAC’s GDP growth upward to 4.5% in 2025, moderating to 4.1% in 2026. India led with 6.6% growth, supported by reforms and digital adoption, while Australia and Japan posted steady gains. GCC economies, particularly KSA and the UAE, benefited from strong oil revenues and diversification into non-oil sectors. Inflation across APAC remained contained, with India recording historic lows due to lower food prices and GST rationalisation, while GCC inflation stayed stable underpinned by subsidies and currency pegs.
The construction industry is expected to have expanded across most markets in 2025. India, Malaysia, and Singapore were standout performers, driven by record infrastructure budgets, digital infrastructure, and renewable energy investments. The UAE and KSA also saw strong growth, supported by Vision 2030 initiatives and large-scale infrastructure projects. Australia and Japan maintained steady momentum, while South Korea contracted due to political instability, impacting project timeframes and housing market weakness.
Looking ahead, 2026–2029 growth is projected at 3–6% annually, with renewable energy, transport, and digital infrastructure, particularly data centres and semiconductors, remaining key drivers. Labour shortages for skilled workers in mission critical projects, rising costs, and tariff-induced supply chain disruptions are persistent challenges.
The commodities outlook highlights moderating global prices in 2025, easing inflationary pressures across APAC. Energy costs declined, supporting construction margins, while clean energy investments in solar, wind, hydrogen, and nuclear emerged as strategic priorities. GCC economies are diversifying into advanced manufacturing and life sciences, while APAC nations are accelerating battery storage and semiconductor capacity to meet AI-driven demand. Supply chain resilience and energy reliability are increasingly critical to project delivery.
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