GlobalData, a leading data and analytics company, says that investment to drive total construction output in China to US$4.1 trillion by 2023 is driven by the Government’s efforts to boost spending on infrastructure. According to this research company, the value of construction industry in China, measured at constant 2017 US dollar exchange rates is expected to rise from US$3.3 trillion in 2018 to US$4.1 trillion in 2023.
GlobalData’s report, ‘Construction in China – Key trends and opportunities to 2023’, reveals that the country’s construction industry is expected to expand at a relatively slower compound annual growth rate (CAGR) of 4.54% over the forecast period (2019–2023), as the government steadily shifts away from a policy of driving economic growth by investing huge sums in infrastructure developments.
Dhananjay Sharma, Construction Analyst at GlobalData, says: “The escalating trade tension between the US and China is affecting China’s exports, thereby hurting its economy and manufacturing industries.”
Residential construction was the largest market in the Chinese construction industry, accounting for 48.4% of its total value in 2018. The market is expected to account for only 43.3% of the industry’s total value in 2023.
Over the forecast period, market output is expected to be supported by the ongoing urbanization and the government’s efforts to renovate aging urban residential buildings.
The total construction project pipeline in China – as tracked by GlobalData, including all mega projects with a value above US$25 million – stands at CNY21.4 trillion (US$3.2 trillion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 77.4% of the pipeline value being in projects in the pre-execution and execution stages as of November 2019.
Sharma concludes: “Nevertheless, in view of the recent slowdown in construction, the authorities can still revert to infrastructure investment to prop up the industry and support the economy when necessary. As such, expansion will be driven by the government’s efforts to boost its spending on infrastructure to counter economic slowdown caused by the ongoing trade tensions with the US.”
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