Global Construction Industry Outlook to 2010: Buyer Spend and Procurement Strategies and the Impact of Recession

• The opinions and forward looking statements of over 300 industry executives have been captured in our in-depth survey, of which over 55% represent Directors, C-levels & Departmental Heads
• This report covers data and analysis on buyer spend, procurement and industry developments by construction contractors and subcontractors, project sponsors, investors and developers and industry suppliers worldwide
• The report examines current practices and provides future expectations over the next 12-24 months
• The research is based on primary survey research conducted by Global Markets Direct in association with ICD Research accessing its B2B panels comprised of senior purchase decision makers and leading supplier organizations
• Key topics covered include buyer spend activity, procurement behaviors & strategies and how these have been affected by the recession, threats & opportunities for the construction industry, sector and region growth forecasts and business confidence.
• In the report buyers identify what suppliers need to do to maintain their business and the key actions being taken by industry players to overcome the leading business threats
• The report provides qualitative analysis of the key industry threats and opportunities and contains full survey results
• The geographical scope of the research is global - drawing on the activity and expectations of leading industry players across the Americas, Europe, Asia-Pacific and Africa & Middle East

• 44% of construction contractors and project sponsors expect to increase their procurement spend to increase over the next 12 months, a further 14% expect to maintain existing spend levels, and with many buyers re-evaluating existing supplier contracts the market open to competition is expected to increase
• 29% of industry buyers are seeking to engage in partnerships to optimize working capital and reduce costs - closer cooperation between suppliers and buyers is being sought during this time of market uncertainty
• Only 17% of industry buyers do not regularly evaluate suppliers to ensure they meet high ethical and environmental standards

• Drive revenues by understanding future product investment areas and growth regions by leading industry players
• Formulate effective sales & marketing strategies by identifying how buyer budgets are changing and where spend will be directed to in the future
• Better promote your business by aligning your capabilities and business practices with your customer’s changing needs during these times of market uncertainty
• Secure stronger customer relationships by understanding the leading business concerns and changing strategies of buyers in the construction industry
• Effectively plan your business strategies
• Predict how the industry will grow, consolidate and where it will stagnate
• Uncover the business outlook, key challenges and opportunities identified by suppliers and buyers in the industry

1 Table Of Contents

1.1 List Of Tables

1.2 List Of Figures

2 Introduction

2.1 What is This Report About?

2.2 Methodology

2.3 Profile Of Survey Respondents

3 Executive Summary

3.1 The Construction Industry is Optimistic About the Early Recovery of the Global Economy

3.2 Uncertainty Prevails in the Construction Industry in Terms of Revenue Growth for the Next 12 Months

3.3 Asia Pacific and Middle East Companies Expected to Witness Highest Increase in Procurement Budgets and European Companies to Witness the Least

3.4 Both Short Term and Long Term Challenges Daunt Construction Industry Players

3.5 Suppliers Should Increase Their Understanding and Align Their Capabilities Better With Buyer Needs to Gain Business Amidst Recession

4 Economic Outlook & Confidence

4.1 Global Economy Recovery Expectations

4.2 Global Construction Growth Forecast For 2010

4.3 Revenue Growth Expectations

5 Construction Industry Investment Outlook

5.1 Construction Growth Opportunities by Region

5.2 Construction Growth Opportunities by Market Sector

5.3 M&A Activity Predictions

5.4 Supplier’s Industry Outlook

6 Recession: Threats and Opportunities for the Construction Industry

6.1 Leading Business Concerns Due to Recession

6.2 Key Actions to Overcome Business Threats

6.3 Key Actions to Maintain and Win Buyer Business

6.4 Leading Recession-Related Business Opportunities

7 Construction Industry Buyer Spend Activity

7.1 Annual Procurement Budgets

7.2 Expected Change in Procurement Spend

7.3 Expected Change in Spend by Product and Service Category

8 Procurement Behaviors & Strategies & the Impact of Recession

8.1 Critical Success Factors for Supplier Selection

8.2 Current Effects of Recession on Procurement Objectives

8.3 Expected Future Effects of Recession on Procurement Objectives

8.4 The Effects of Recession on Procurement Strategy

9 Appendix

9.1 Full Survey Results

9.2 Methodology

9.3 Contact Us

9.4 About Global Markets Direct

9.5 Disclaimer

1.1 List Of Tables

Table 1: Count Of Global Construction Industry Survey Respondents By Company Type (Number Of Respondents), 2009 Industry Survey

Table 2: Buyer Respondents By Job Role (% Buyer Respondents), Global Construction Industry, 2009

Table 3: Buyer Respondents By Organization’s Global Turnover (% Buyer Respondents), Global Construction Industry, 2009

Table 4: Buyer Respondents By Organization’s Total Employee Size (% Buyer Respondents), Global Construction Industry, 2009

Table 5: Supplier Respondents By Job Role (% Supplier Respondents), Global Construction Industry, 2009

Table 6: Supplier Respondents By Organization’s Global Turnover (% Supplier Respondents), Global Construction Industry, 2009

Table 7: Supplier Respondents By Organization's Total Employee Size (% Supplier Respondents), Global Construction Industry, 2009

Table 8: Global Construction Industry Expectations Of Global Economy Recovery Timings By Region: North America, Europe, Asia-Pacific, Rest Of World (% All Respondents), 2009

Table 9: Global Construction Industry Expectations Of Global Economy Recovery Timings By Company Type: Construction Contractors / Project Sponsors Or Developers, Construction Equipment, Materials & Products Suppliers / Distributors, Other Construction Industry Suppliers (% All Respondents), 2009

Table 10: Global Construction Industry Forecast Of Global Construction Economy Growth By Company Type: Construction Contractor / Project Sponsor Or Developer Vs. Construction Equipment, Materials & Products Supplier / Distributor Vs. Other Construction Industry Supplier Vs. Average Expectations (% All Respondents), 2009

Table 11: Company Revenue Growth Optimism By Global Construction Industry Company Type: Buyers (Construction Contractors / Project Sponsors Or Developers) Vs. Suppliers (Construction Equipment, Materials & Products Suppliers / Distributors, Other Construction Industry Suppliers) (% All Respondents), 2009

Table 12: Company Revenue Growth Optimism In The Global Construction Industry By Region: North America, Europe, Asia-Pacific, Rest Of World (% All Respondents), 2009

Table 13: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Table 14: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Table 15: Other Construction Industry Supplier Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Other Construction Industry Supplier Respondents), 2009

Table 16: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Table 17: Construction Equipment, Materials & Products Supplier / Distributor Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Construction Equipment, Materials & Products Supplier / Distributor Respondents), 2009

Table 18: Other Construction Industry Supplier Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Other Construction Industry Supplier Respondents), 2009

Table 19: Key Growth Areas In The Global Construction Industry (Analysis Of Supplier Respondents), 2009

Table 20: Key Growth Areas In The Global Construction Industry (Analysis Of Senior Level Supplier Respondents), 2009

Table 21: Key Declining Areas In The Global Construction Industry (Analysis Of Supplier Respondents), 2009

Table 22: Key Declining Areas In The Global Construction Industry (Analysis Of Senior Level Respondents), 2009

Table 23: Construction Contractor / Project Sponsor Or Developer Vs. Construction Equipment, Materials & Products Supplier / Distributor Vs. Other Construction Industry Supplier: Leading Business Concerns For The Period 2009-2010 Among Global Construction Industry Buyers And Suppliers (% All Respondents), 2009

Table 24: Leading Business Concerns For The Period 2009-2010 Among Global Construction Industry Buyers And Suppliers By Region: North America, Europe, Asia-Pacific, Rest Of World (% All Respondents), 2009

Table 25: Most Important Actions Being Implemented To Overcome Leading Business Concerns In 2009-2010 In The Global Construction Industry (Analysis Of All Respondents), 2009

Table 26: Most Important Actions Being Implemented To Overcome Leading Business Concerns In 2009- 2010 In The Global Construction Industry- Senior Level Responses Only (Analysis Of Senior Level Respondents), 2009

Table 27: Most Important Actions Being Implemented By Construction Equipment, Materials & Product Suppliers / Distributors, Other Construction Industry Suppliers To Overcome Leading Business Concerns In 2009- 2010 In The Global Construction Industry (Analysis Of Construction Equipment, Materials & Product Suppliers / Distributors, Other Construction Industry Suppliers Respondents), 2009

Table 28: Most Important Actions Being Implemented By Construction Contractors / Project Sponsors Or Developers To Overcome Leading Business Concerns In 2009- 2010 In The Global Construction Industry (Analysis Of Construction Contractors / Project Sponsors Or Developers Respondents), 2009

Table 29: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Supplier Responses Vs. All Buyer Responses (% All Respondents), 2009

Table 30: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Analysis Of Buyer Respondents By Company Turnover (% Buyer Respondents), 2009

Table 31: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Analysis Of All Buyer Respondents By Procurement Budget (% Buyer Respondents), 2009

Table 32: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Analysis Of All Buyer Respondents By Region (% Buyer Respondents), 2009

Table 33: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Analysis Of All Buyer Respondents By Purchasing Decision Seniority (% Buyer Respondents With Purchasing Decision Influence), 2009

Table 34: Leading Business Opportunities During The Recession In The Global Construction Industry (Analysis Of All Respondents), 2009

Table 35: Leading Business Opportunities During The Recession In The Global Construction Industry - Senior Level Responses Only (Analysis Of Senior Level Respondents), 2009

Table 36: Leading Business Opportunities For Construction Contractors / Project Sponsors Or Developers During The Recession In The Global Construction Industry (Analysis Of Buyer Respondents), 2009

Table 37: Leading Business Opportunities For Construction Equipment, Materials & Product Suppliers / Distributors, Other Construction Industry Suppliers During The Recession In The Global Construction Industry (Analysis Of Supplier Respondents), 2009

Table 38: Annual Procurement Budgets In US$ In The Global Construction Industry: Construction Contractor / Project Sponsor Or Developer (% All Buyer Respondents), 2009

Table 39: Annual Procurement Budgets In US$ In The Global Construction Industry By Region (% All Buyer Respondents), 2009

Table 40: Expected Change In Spend On Products & Services In The Global Construction Industry Over The Next 12 Months: Construction Contractor / Project Sponsor Or Developer (% All Buyer Respondents), 2009

Table 41: Future Change In Spend In The Global Construction Industry By Product And Service Category: Construction Contractor / Project Sponsor Or Developer - Expected Increase Or Decrease Over The Next 12 Months (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Table 42: Critical Success Factors For Selecting A Construction Industry Supplier: Buyer Vs. Supplier Comparison (% All Respondents), Global, 2009

Table 43: Current Effects Of Recession On Procurement Objectives & Priorities In The Global Construction Industry By Company Turnover (% All Buyer Respondents), 2009

Table 44: Expected Changes In Procurement Strategy In The Global Construction Industry To Drive Value Across The Business Due To Recession: All Buyers By Company Turnover (% All Buyer Respondents), 2009

Table 45: Expected Changes In Procurement Strategy In The Global Construction Industry To Drive Value Across The Business Due To Recession: All Buyers By Purchasing Decision Seniority (% All Buyer Respondents Purchasing Decision Influence), 2009

Table 46: Expected Changes In Procurement Strategy In The Global Construction Industry To Drive Value Across The Business Due To Recession: All Buyers By Region (% All Buyer Respondents), 2009

Table 47: Construction Contractor / Project Sponsor Or Developer Attitudes & Approaches To Existing Procurement Practices: Level Of Agreement To The Following 5 Statements (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Table 48: Full Survey Results-Closed Questions

1.2 List Of Figures

Figure 1: Leading Business Concerns For The Period 2009-2010 Among Global Construction Industry Buyers And Suppliers (% All Respondents), 2009

Figure 2: Global Construction Industry Expectations Of Global Economy Recovery Timings (% All Respondents), 2009

Figure 3: Global Construction Industry Expectations Of Global Economy Recovery Timings By Region: North America, Europe, Asia-Pacific, Rest Of World (% All Respondents), 2009

Figure 4: Global Construction Industry Expectations Of Global Economy Recovery Timings By Company Type: Construction Contractors / Project Sponsors Or Developers, Construction Equipment, Materials & Products Suppliers / Distributors, Other Construction Industry Suppliers (% All Respondents), 2009

Figure 5: Global Construction Industry Forecast Of Global Construction Economy Growth By Company Type: Construction Contractor / Project Sponsor Or Developer Vs. Construction Equipment, Materials & Products Supplier / Distributor Vs. Other Construction Industry Supplier Vs. Average Expectations (% All Respondents), 2009

Figure 6: Company Revenue Growth Optimism In The Global Construction Industry (% All Respondents), 2009

Figure 7: Company Revenue Growth Optimism By Global Construction Industry Company Type: Buyers (Construction Contractors / Project Sponsors Or Developers) Vs. Suppliers (Construction Equipment, Materials & Products Suppliers / Distributors, Other Construction Industry Suppliers) (% All Respondents), 2009

Figure 8: Company Revenue Growth Optimism In The Global Construction Industry By Region: North America, Europe, Asia-Pacific, Rest Of World (% All Respondents), 2009

Figure 9: Overall Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% All Respondents), 2009

Figure 10: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Figure 11: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Figure 12: Other Construction Industry Supplier Industry: Market Predictions Of The Fastest And Slowest Growing Regions For The Construction Industry (% Other Construction Industry Supplier Respondents), 2009

Figure 13: Overall Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% All Respondents), 2009

Figure 14: Construction Contractor / Project Sponsor Or Developer Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Figure 15: Construction Equipment, Materials & Products Supplier / Distributor Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Construction Equipment, Materials & Products Supplier / Distributor Respondents), 2009

Figure 16: Other Construction Industry Supplier Industry: Market Predictions Of The Fastest And Slowest Growing Market Sectors For The Construction Industry (% Other Construction Industry Supplier Respondents), 2009

Figure 17: Merger & Acquisition Activity Expectations Over The Next 12 Months In The Global Construction Contractor / Project Sponsor Or Developer Industry (% Construction Contractor / Project Sponsor Or Developer Industry Respondents), 2009

Figure 18: Merger & Acquisition Activity Expectations Over The Next 12 Months In The Global Construction Equipment, Materials & Products Supplier / Distributor Industry (% Construction Equipment, Materials & Products Supplier / Distributor Industry Respondents), 2009

Figure 19: Merger & Acquisition Activity Expectations Over The Next 12 Months In The Global Other Construction Industry Supplier Industry (% Other Construction Industry Supplier Industry Respondents), 2009

Figure 20: Leading Business Concerns For The Period 2009-2010 Among Global Construction Industry Buyers And Suppliers (% All Respondents), 2009

Figure 21: Construction Contractor / Project Sponsor Or Developer Vs. Construction Equipment, Materials & Products Supplier / Distributor Vs. Other Construction Industry Supplier: Leading Business Concerns For The Period 2009-2010 Among Global Construction Industry Buyers And Suppliers (% All Respondents), 2009

Figure 22: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Supplier Responses Vs. All Buyer Responses (% All Respondents), 2009

Figure 23: The Most Important Actions For Suppliers To Take To Maintain And Secure Buyer Business During The Recession In The Global Construction Industry: Analysis Of All Buyer Respondents By Region (% Buyer Respondents), 2009

Figure 24: Annual Procurement Budgets In US$ In The Global Construction Industry: Construction Contractor / Project Sponsor Or Developer (% All Buyer Respondents), 2009

Figure 25: Annual Procurement Budgets In US$ In The Global Construction Industry By Company Turnover (% All Buyer Respondents), 2009

Figure 26: Annual Procurement Budgets In US$ In The Global Construction Industry By Region (% All Buyer Respondents), 2009

Figure 27: Expected Change In Spend On Products & Services In The Global Construction Industry Over The Next 12 Months: Construction Contractor / Project Sponsor Or Developer (% All Buyer Respondents), 2009

Figure 28: Expected Change In Spend On Products & Services In The Global Construction Industry Over The Next 12 Months By Company Turnover (% All Buyer Respondents), 2009

Figure 29: Expected Change In Spend On Products & Services In The Global Construction Industry Over The Next 12 Months By Region (% All Buyer Respondents), 2009

Figure 30: Future Change In Spend In The Global Construction Industry By Product And Service Category: Construction Contractor / Project Sponsor Or Developer - Expected Increase Or Decrease Over The Next 12 Months (% Construction Contractor / Project Sponsor Or Developer Respondents), 2009

Figure 31: Future Change In Spend In The Global Construction Industry By Product And Service Category: Expected Increase Over The Next 12 Months Construction Contractor / Project Sponsor Or Developer (% All Buyer Respondents), 2009

Figure 32: Future Change In Spend In The Global Construction Industry By Product And Service Category: Expected Increase Over The Next 12 Months Among All Buyers By Company Turnover (% All Buyer Respondents), 2009

Figure 33: Future Change In Spend In The Global Construction Industry By Product And Service Category: Expected Increase Over The Next 12 Months Among All Buyers By Region (% All Buyer Respondents), 2009

Figure 34: Critical Success Factors For Selecting A Construction Industry Supplier: Difference In Views, Buyers Vs. Suppliers (Net Difference In Ranking), Global, 2009

Figure 35: Critical Success Factors For Selecting A Construction Industry Supplier: Buyer Vs. Supplier Comparison (% All Respondents), Global, 2009

Figure 36: Current Effects Of Recession On Procurement Objectives & Priorities In The Global Construction Industry (% All Buyer Respondents), 2009

Figure 37: Likelihood Of Future Change In Procurement Objectives In The Global Construction Industry (% All Buyer Respondents), 2009

Figure 38: Likelihood Of Future Change On Procurement Objectives In The Global Construction Industry By Company Turnover (% All Buyer Respondents), 2009

Figure 39: Expected Future Effects Of Recession On Procurement Objectives & Priorities In The Global Construction Industry (% All Buyer Respondents), 2009

Figure 40: Expected Future Effects Of Recession On Procurement Objectives & Priorities In The Global Construction Industry By Company Turnover (% All Buyer Respondents), 2009

Figure 41: Expected Changes In Procurement Strategy In The Global Construction Industry To Drive Value Across The Business Due To Recession (% All Buyer Respondents), 2009

Figure 42: Expected Changes In Procurement Strategy In The Global Construction Industry To Drive Value Across The Business Due To Recession: All Buyers By Region (% All Buyer Respondents), 2009