We expect real growth in Denmark's construction industry of 3.9% y-o-y during 2022, down from 4.1% y-o-y real growth seen in 2021, as the industry returns to its long-term trend rate of growth following the Covid-19 pandemic. While the impact of elevated construction costs will deliver delays and cost overruns to project activity in the near-term, the market's substantial project pipeline of infrastructure projects, particularly in offshore wind, will sustain the industry's growth over the decade. Across our forecast period to 2031, we expect the industry to average annual real growth of 3.7% y-o-y.
Denmark's construction industry continues to be a relative outperformer within Western Europe, with consistent positive real growth and a burgeoning project pipeline of over USD55bn worth of projects according to our Infrastructure Key Projects Data. The relatively lighter treatment of construction activity throughout the Covid-19 pandemic, which allowed for the continuation of works provided that adequate health measures were adhered to, enabled the industry to grow by 1.2% y-o-y in real terms in 2020 while the wider Western European construction industry contracted by 6.1% y-o-y. As such, quarterly data from Statistics Denmark on seasonally adjusted figures for gross value added by the construction industry have borne out our positive view of Denmark's construction industry throughout the Covid-19 pandemic (see chart below).
In comparison to its regional peers, Denmark exhibited one of the most stable real growth environments for construction during the Covid-19 pandemic; benefitting from both remaining in positive real growth territory during 2020 and benefiting from the broader base effects seen in the global economy during 2021. Only Germany managed to outpace Denmark's construction industry real growth during 2020, with Germany seeing 3.8% y-o-y in 2020 before a 0.5% y-o-y contraction in 2021.