Construction Outlook for China

Freedonia Group Inc

- Pub ID: FG1493154

Countries covered: China, Asia

Construction expenditures in China to increase 8.8% annually through 2011
Construction expenditures in China are forecast to increase 8.8 percent annually through 2011 to ¥6.4 trillion in real (inflation- adjusted) terms. An ever expanding domestic economy, continuing endeavors to upgrade infrastructure, sustained strength in foreign investment funding, healthy demand for Chinese manufactured goods, and further population and household growth will all work to drive construction market gains in China.

Nonbuilding construction to post fastest gains
Nonbuilding construction expenditures will climb ten percent annually in real terms through 2011, fueled primarily by the government’s efforts to modernize and expand China’s physical infrastructure. These efforts include plans to upgrade the nation’s rail system, to expand the national highway network -- known as the “7918 Network”, and to enhance energy supplies through construction of new power plants such as the Xiluodu Hydropower Plant and the Yangjiang Nuclear Power Station.

Nonresidential buildings to remain the largest construction market
In 2006, the nonresidential building market accounted for over two-fifths of construction expenditures in China, reflecting the country’s emergence as an economic powerhouse over the last decade and its position as the largest producer of manufactured goods in the world. Nonresidential construction spending is forecast to rise nine percent annually in real terms through 2011, stimulated by continued strength in foreign direct investment, growth in consumer spending and accommodative government policies.

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Additional Information

Residential buildings to continue healthy advances
Residential building construction expenditures will climb at an eight percent annual pace in real terms through 2011, driven by rising employment and personal income levels, further urbanization of the population, and government efforts to increase average per-capita living space. In addition, many of the poorly constructed buildings erected during the 1980s and 1990s will need to be replaced, further spurring growth in residential construction spending.

New construction continues to outpace improvements & repairs New construction will advance at a nine percent annual rate in real terms through 2011, continuing to outpace improvements and repairs. This trend will sustain through the next decade as China continues a high pace of economic development and industrialization. New construction also dwarfs improvements and repairs in size, accounting for over three-quarters of all construction expenditures in 2011.

Opportunities vary by region
Although China is a single nation, it consists of numerous distinct markets characterized by different economies, languages and cultures. Construction expenditures in the Northwest and Southwest regions are fueled by government efforts to attain a more balanced regional development. However, the Central-East and Central- South regions will remain home to well over half of China’s total population and will account for close to two-thirds of all economic activity in 2011, stimulating substantial construction services.

Study coverage
This updated Freedonia study, Construction Outlook for China, is priced at $4900. It presents historical demand data (1996, 2001, 2006) and forecasts to 2011 and 2016 by construction type (new, additions and alterations, maintenance and repair); market (residential, nonresidential, nonbuilding) and region. The study also considers market environment factors, evaluates company market share and profiles leading industry competitors.

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