Construction industry needs to look beyond national boundaries, says BDO

USA provides best opportunities for inbound construction for G20 nations

Of all the G20 nations, the USA will provide the biggest opportunity for inbound construction projects in the future, according to new research released today from BDO’s Real Estate and Construction Sector.

Despite some obvious hurdles, such as high levels of red tape and taxes, the US comes out on top of BDO’s G20 Heatmap because of the potential for upcoming construction projects.  One such project is the recently announced economic stimulus package which proposes spending of around US$150 billion on infrastructure over the next three years - making it the biggest investment since President Eisenhower developed the US highway system in the 1950s.

Richard Kelly, Head of Construction, at BDO says: “As a rule, the construction sector is an industry that has been limited by national boundaries, with companies often ignoring the significant opportunities that exist beyond their own shores.” 

“While the effort required to break into the USA, and other international markets, may appear to be daunting, even taking just a tiny nibble of this enormous cake could be enough to satisfy the greediest of construction business appetites,” points out Kelly.

Following close behind the USA to take spots number two and three were the UK and Canada respectively, suggesting that the greatest opportunities are not always in those territories touted as being the next big thing.

“The idea that the UK and Canada could offer more potential than China, Saudi Arabia or even India is startling,” says Kelly.  “It clearly demonstrates the importance of carrying out a rigorous analysis of opportunities and balancing them with the barriers to entry.”

“Clearly there are opportunities to be had in the East and Middle East, but the combined clout of the top three countries makes it impossible to ignore the potential lying west of mainland Europe,” continues Kelly.

So what makes an attractive market?

The BDO’s G20 Heatmap has considered a number of factors which make a country attractive for inbound construction:

  • The upcoming construction projects the country has planned
  • Whether a country has the means to fund the construction projects it has earmarked
  • The focus on taxation – including low rates of corporation tax, the flexibility of using shareholder debt, the presence and ease of obtaining tax relief, the time taken to prepare tax returns and the overall number of tax payments
  • Strong credit ratings
  • The ease of doing business
  • Low corruption levels
  • Few regulatory barriers.

“There are clearly some fantastic construction opportunities across the G20 nations.  Companies now need to look beyond their home territories, weigh up the benefits and hurdles and seriously consider how they can take full advantage,” concludes Kelly.

BDO’s G20 Heatmap rankings

  1. USA
  2. UK
  3. Canada
  4. China
  5. Japan
  6. Saudi Arabia
  7. Australia
  8. India
  9. South Africa
  10. South Korea
  11. France
  12. Turkey
  13. German
  14. Indonesia
  15. Italy
  16. Russia
  17. Brazil
  18. Mexico
  19. Argentina


ENDS

For more information, please contact Dee Crooks at BDO on 020 7893 2761 / 07815 172 051 or email dee.crooks@bdo.co.uk


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