The U.S. International Construction Industry

Most of the construction work in a nation is typically performed by companies that are based in that nation. For a U.S. contractor to win an award in another country, it generally must offer highly specialized technological or managerial capabilities. In most cases, only highly skilled U.S. engineers and other professional employees participate in overseas projects. U.S. construction contractors perform very well in international competition for large, technologically sophisticated projects such as petroleum and chemical plants and power generation plants. They fare less well in international competition for building construction and basic infrastructure construction such as roads and ports, areas in which U.S. firms have no strong technological or management advantage. Rapid economic growth in Asia and South America is causing those regions to increase in importance in international construction. U.S. contractors’ future success in these and other international markets will depend on a variety of considerations such as the extent to which foreign markets are open to international competition, the contractors’ ability to offer financing at competitive rates, and technological capabilities. The competitive strengths of foreign affiliates will also be a major factor since such affiliates are often critical in winning foreign contracts.