Major industry leaders have predicted a very busy and prosperous future for the construction industry, as infrastructure becomes a priority for governments across the world following two years of uncertainty.

Initiatives such as the UK government’s Green Industrial Revolution plan are part of what industry leaders have described as a ‘supercycle’ set to help construction companies through the next five years.

However, to understand what this could mean to contractors, local authorities, and the availability of building materials online, it is important to understand what a supercycle is.


What Is A Supercycle?

According to the investment website The Motley Fool, an economic supercycle is a sustained period of expansion in the market, usually defined by a huge growth in demand, to the point that it can affect the supply of raw and refined materials, cause spiking prices and long periods of prosperity.

A common characteristic of a supercycle that sets it apart from other economic waves is extreme upswings and downswings, where huge demand and limited supply causes huge price increases well above their trending price whilst extra capacity is set up.

Once that is set up, however, there can often be too much supply as demand slows, leading to prices lower than normal, which will continue until an equilibrium is reached.


How Did The Construction Supercycle Begin?

The past two years have seen an unprecedented level of challenge for nearly everyone in the world, and the construction industry shut down for several weeks before finding a way to open safely.

During this time, considerable amounts of money (up to £600bn) were earmarked for major infrastructure projects as part of a far-reaching transformation of many areas of infrastructure, including construction, with an aim of achieving net-zero carbon emissions in the industry.

Similar emergency funds, such as the EU recovery fund on the continent and a $1tn infrastructure bill in the United States, would also help fuel this supercycle.

This includes major road repair projects, infrastructure modernisation, alterations to millions of homes to retrofit them with energy-efficient technology, the construction of EV charge points and infrastructure for both these and hydrogen fuel cell vehicles are part of these proposals.

As well as this, a considerable shortfall in property available on the market has led to a push to produce new sustainable homes, which has increased the price of not only concrete but also sustainable timber.

As well as this, the long-planned High Speed 2 rail upgrade was finally approved and started construction in April 2020, creating at least a decade of demand for construction materials and equipment.

This supercycle, therefore, is made up of both a short term stimulus push by world governments to help stimulate an economy hit by a global crisis, and a long term goal to create lasting sustainable infrastructure to build towards a goal of net-zero carbon dioxide.

As policies become solid plans and these plans lead to contracts being signed, this huge wave of growth and prosperity for the industry is set to continue and increase demand for materials, technology, tools and contractors in the process.

How long it will last is uncertain, with some analysts claiming that it could match the last supercycle, which began in 2002 with China’s rapid industrialisation and ended in 2015 with major stock market drops.