Global 2023 Construction Outlook: Record Backlogs Support Sector Despite Building Headwinds

Going into 2023, DBRS Morningstar's neutral outlook reflects our view that the credit risk profiles of construction companies in our portfolio will continue to remain supportive of their current ratings. The global industry has been bolstered by pent-up demand following years of weakened output due to global lockdowns and reduced spending during the Coronavirus Disease (COVID-19) pandemic. As global spending to support infrastructure projects has been particularly strong and, as large projects take several years to complete, this provides a healthy degree of near-term stability for large construction companies. In addition to infrastructure, healthcare and institutional construction has been especially strong, which has resulted in many construction companies entering 2023 with backlogs at an all-time high, providing multiyear revenue visibility.