The construction industry is a pivotal sector of any economy, and it is also one that is often used by governments to stimulate economic growth. This sector employs millions of people, and government spending leads to more employment and spending in the economy as houses, apartment complexes, road works, and other buildings are built. This in turn also ends up supporting a variety of different industries involving building materials such as wood, cement, and steel.
Therefore, it's no surprise that the construction industry is also one of the largest in the world - deemed more valuable than lucrative sectors such as crude oil and automotive. For instance, a research report from Exactitude Consultancy outlines that this sector was worth $11 trillion last year and it will grow at a compounded annual growth rate (CAGR) of 7.3% between then and 2029 to sit at an estimated worth of $17 trillion. The research firm attributes this growth to rising global populations and more people heading to the cities to earn and live.
However, simply due to its scale, the construction sector also carries large risks that can disrupt even the global economy. For instance, the hottest topic in the industry these days is China's Evergrande Group. Evergrande is the second largest property developer in the world's largest economy in terms of purchasing power parity. The Chinese government heavily stimulated the real estate sector in the wake of the 2008 financial crisis, so much so that there is now an oversupply of housing units and other buildings - leading to what are called 'ghost cities' made up of large apartment buildings and other complexes that are simply sitting vacant. Evergrande, like other real estate firms, relied heavily on debt to fund its construction.
But it was declared a defaulter by S&P Global in December last year after it missed bond payments. The liquidity crisis at Chinese firms started when the government introduced a new policy that limited the debt that they could take to fund new projects. The only problem was that the companies, with massive capital tied in illiquid assets, had relied on raising more debt to pay off earlier debt, relying on the age-old mantra of being 'too big to fail'. A failure at Evergrande threatened to disrupt Western financial markets as well, as large firms such as BlackRock had bought millions of dollars of its debt.
Like other industries, the construction sector is also relying on new technologies to boost its operations. For instance, companies now use LiDAR sensors to survey land, detect if there are any construction flaws, and map out the terrain on which they plan to build their buildings. Additionally, firms such as Shimabun are selling equipment that makes hardhats connect to the cloud to report on worker health to improve safety.
Today's piece will focus on the largest construction companies in the world, with the top players being China State Construction Engineering Corporation Limited (SHA:601668.SS), D.R. Horton, Inc. (NYSE:DHI), and Vinci SA (EPA:DG.PA).
We took a look at the construction industry to identify the top players, which are then ranked according to their market capitalization.
Biggest Construction Companies in the World
15. Eiffage SA (EPA:FGR.PA)
Market Capitalization as of December 20, 2022: $9.55 billion (1EUR = 1.06USD)
Eiffage SA (EPA:FGR.PA) is a French construction firm that is headquartered in Vélizy Villacoublay, France. The firm was set up in 1992 and it is one of the top ten largest construction companies in Europe. However, Eiffage SA (EPA:FGR.PA) traces its roots back to 1844, as one of its constituent firms was set up in the 19th century. The company primarily focuses on urban construction projects such as railroads, stadiums, roads, metros, and solar parks.
Along with D.R. Horton, Inc. (NYSE:DHI), China State Construction Engineering Corporation Limited (SHA:601668.SS), and Vinci SA (EPA:DG.PA), Eiffage SA (EPA:FGR.PA) is one of the biggest construction companies in the world.
14. Acciona, S.A. (BME:ANA.MC)
Market Capitalization as of December 20, 2022: $10 billion (1EUR = 1.06USD)
Acciona, S.A. (BME:ANA.MC) is a Spanish construction company that was set up in 1916 and is headquartered in Alcobendas, Spain. The firm is involved in the construction of a wide variety of projects such as roads, power plants, airports, water channels, data centers, and transportation systems. Additionally, the firm has a global presence, and it also generates solar electricity through its power plants. Acciona, S.A. (BME:ANA.MC) generated 11.4 Gigawatts of renewable energy as of September 2022.
13. Bouygues SA (EPA:EN.PA)
Market Capitalization as of December 20, 2022: $11.28 billion (1EUR = 1.06USD)
Bouygues SA (EPA:EN.PA) is a French conglomerate that has a presence in the construction, telecommunications, and media industries. It was set up and is currently led by the Bouygues family. The firm's construction businesses include Bouygues Construction, Colas Group, and Bouygues Immobilier. These build a variety of different facilities and buildings such as hotels, railways, roadworks, residential complexes, and power generation plants.
12. Sekisui House, Ltd. (TYO:1928.T)
Market Capitalization as of December 20, 2022: $11.6 billion (1Yen = 0.0076USD)
Sekisui House, Ltd. (TYO:1928.T) is a Japanese firm based in Osaka and set up in 1929. The firm primarily builds residential properties such as houses, alongside dabbling in hotel construction as well. It also offers home remodeling services. Additionally, Sekisui House, Ltd. (TYO:1928.T) also has an Australian division. It claims to have built more than two million homes since being formed, and alongside Australia, it also has a presence in the U.S., China, Canada, and the U.K.
11. China Railway Construction Corporation Limited (SHA:601186.SS)
Market Capitalization as of December 20, 2022: $14.28 billion (1Yuan = 0.14USD)
China Railway Construction Corporation Limited (SHA:601186.SS) is one of the largest construction companies in the world when it comes to revenue. It is a diversified construction company that not only builds projects but also provides other services such as surveying, buying and selling properties, and designing, making, and selling equipment for railway construction. China Railway Construction Corporation Limited (SHA:601186.SS) has built projects all over the world, including China, Pakistan, Bangladesh, Egypt, Turkey, and Russia.
Market Capitalization as of December 20, 2022: $15 billion
NVR, Inc. (NYSE:NVR) is an American firm that targets the home building industry. It builds condos, detached single family homes, and town homes. Additionally, the firm also provides mortgage title insurance and other mortgage related services. NVR, Inc. (NYSE:NVR) is the fourth largest American construction firm in terms of houses sold, and its latest share price of a whopping $4,697 per share makes it the second most expensive stock on the U.S. markets after Berkshire Hathaway.
Insider Monkey's Q3 2022 survey of 920 hedge funds revealed that 34 had invested in NVR, Inc. (NYSE:NVR).
NVR, Inc. (NYSE:NVR)'s largest shareholder in our database is Ric Dillon's Diamond Hill Capital which owns 124,155 shares that are worth $495 million.
9. Daiwa House Industry Co., Ltd. (TYO:1925.T)
Market Capitalization as of December 20, 2022: $15 billion (1Yen = 0.0076USD)
Daiwa House Industry Co., Ltd. (TYO:1925.T) is a Japanese real estate development firm that builds houses, transport facilities, condos, and other buildings. The firm also provides surveying facilities alongside operating hotels. Daiwa House Industry Co., Ltd. (TYO:1925.T) has also been characterized as Japan's largest home builder, and its logistics business is also one of the largest in the country. It also provides home renovation services, alongside putting up houses for rent.
8. China Communications Construction Company Limited (SHA:601800.SS)
Market Capitalization as of December 20, 2022: $15.9 billion (1Yuan = 0.14USD)
China Communications Construction Company Limited (SHA:601800.SS) is a Chinese infrastructure builder that is headquartered in Beijing, the People's Republic of China. Some of the company's projects include railways, rail transit, bridges, roads, and city infrastructure. It also claims to be the world's largest port, highway, dredging, and container crane manufacturing company. Additionally, the China Communications Construction Company Limited (SHA:601800.SS) has dozens of subsidiaries that operate all over the globe.
7. China Railway Group Limited (HKG:0390.HK)
Market Capitalization as of December 20, 2022: $18.86 billion (1HKD = 0.13USD)
China Railway Group Limited (HKG:0390.HK) is a diversified Chinese infrastructure construction company. The firm builds railways, airports, highways, tunnels, and power generation projects. Additionally, it also provides surveying services and makes and sells construction machinery. China Railway Group Limited (HKG:0390.HK) has also been ranked as the world's largest construction company in terms of revenue in the past, and it has dozens of subsidiaries under its belt.
6. Ferrovial, S.A. (BME:FER.MC)
Market Capitalization as of December 20, 2022: $18.89 billion (1 EUR = 1.06USD)
Ferrovial, S.A. (BME:FER.MC) is a Spanish construction company that is headquartered in Madrid. The firm operates in Europe, Canada, the U.S., and other countries through different subsidiaries. Its different business divisions oversee the construction of projects such as roads and airports. Additionally, Ferrovial, S.A. (BME:FER.MC) is also one of the U.K.'s largest airport operators, with seven airports under its belt including Heathrow.
Ferrovial, S.A. (BME:FER.MC) is one of the world's largest construction companies, joining others such as China State Construction Engineering Corporation Limited (SHA:601668.SS), D.R. Horton, Inc. (NYSE:DHI), and Vinci SA (EPA:DG.PA).
