The report shows global construction activity falling from a high of 5% level in 2006, attributing the decline to the ongoing slowdown in the US housing market.
The UK market has fared better than expected, with increased investment in infrastructure buoying activity. Investment should continue with large projects such as Crossrail and Shellhaven getting the green light.
Davis Langdon expects this to continue throughout 2008, driven largely by continued investment in infrastructure prior to the 2012 Olympic Games.
However, the report claims that the full effects of the US credit crunch are yet to be felt. Liquidity problems are likely to affect the commercial sector as well as publicly funded construction projects, which account for roughly 30% of all industry activity in 2007.
Dvelopments under construction will face finance problems alongside the private housing sector, which is expected to decline as a result of the increasingly difficult market conditions and the credit crunch.
The report remains optimistic that the worst effects of a UK housing slump can be avoided by increasing funding for public housing.
In the worldwide market, although the US still represents the largest national construction output, countries in the Asian-Pacific region are showing the highest growth rates, with China experiencing a 9.5% increase in activity and India's figure for 2007 rising 8% on the previous year.