Magic Numbers

17 July 2017

It is a completely arbitrary number, pleasing only because it plays into a base 10 counting system, but compound growth of 7% results in a doubling time of 10 years. That’s what the growth of the tunnelling industry currently stands at according to the International Tunnelling Association (ITA), 7% per year which is expected to continue for the near future. Or at least the next five to 10 years.

At the World Tunnel Congress in Bergen, Norway this year, the ITA released its Tunnel Market Survey, which contains data from 89 countries and 2,300 tunnel projects. It has been a difficult project, with incomplete but fairly reliable data from some countries, while others such as China have proven challenging even for local engineers. However, the booklet released by the ITA has some interesting numbers.

Construction being generally considered 10% of global GDP (gross domestic product – the total value of all goods and services produced within an economy), in 2013 the global GDP of USD 75 trillion saw a construction output of USD 7.5 trillion. Construction grew by 3.9% per annum and hit around USD 8.5 trillion in 2016.

Tunnelling is growing nearly twice as fast, hitting that 7% figure and around USD 90bn total market value in 2016, or around 1% of total construction output. This translates into approximately 5,200km constructed a year, which represents a total growth of 15% for the period.

Projected growth is a particularly slippery statistic owing to the difference in planning times between regions. For example, a project in Western Europe might be planned for decades before ever a shovel enters the ground, but China can plan, construct and commission a project within a handful of years.

Nevertheless, the ITA predicts around USD 770bn of output over the next eight years, with Europe representing 36% of these projects and China representing just 15% for the reason given. China still represents around 50% of global work for the near future.

In summary, the Middle East has greatly increased in value, Europe is fl at, North America has shrunk, China has grown, but shrunk in relative value to other regions, and Latin America still has great potential. Africa has the need for tunnels, but little activity yet.

Nigeria is due to become the third most populous country in the world by 2050, but the continent as a whole is expected to have 20 cities with more than two million inhabitants by 2025. Nigeria was welcomed as an ITA Member Nation in 2017 after being founded in 2015. The move can only be a positive for the itself and its neighbours.