Gross Domestic Product (GDP) is the sum of all legal transactions that take place in a given location and at a given time.

Its growth rate is an important measure of an economy’s strength – if people are spending more than they were last year, then they probably have more money to spend. It is relevant to the construction industry because more spending means more demand for offices, homes, warehouses, and roads.

The economy broadly came back online in the last year. GDP growth accelerated towards the end of the year, and today it is higher than it’s ever been. There are, of course, many caveats and many reasons why GDP is a flawed estimator. For one, it does not consider how wealth is distributed. The recovery has not been uniform – sectors (and cities) centered on the flow of information, like finance and technology, recovered quickly and are stronger than ever. Sectors centered on the flow of people – like tourism and leisure – remain well below their pre-pandemic levels. GDP also does not account for inflation, which is increasingly becoming a concern.

Forecasts for 2022 have been tempered somewhat by concerns about inflation but remain positive. Even the most conservative estimates show the economy growing over the next year. It will, however, be prudent to watch which sectors and cities these gains go to. This will help to get a better picture of the state of the economy.

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