LONDON, U.K. — The value of the construction industry in China, measured at constant 2017 U.S. dollar exchange rates, is expected to rise from US$3.3 trillion in 2018 to US$4.1 trillion in 2023, driven by the government’s efforts to boost spending on infrastructure, says GlobalData.
A leading data and analytics company, 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 per cent over the forecast period (2019 to 2023), as the government steadily shifts away from a policy of driving economic growth by investing huge sums in infrastructure developments, indicates a release.
Residential construction was the largest market in the Chinese construction industry, accounting for 48.4 per cent of its total value in 2018 and by 2023, the market is expected to account for 43.3 per cent.
Over the forecast period, market output is expected to be supported by ongoing urbanization and the government’s efforts to renovate aging urban residential buildings.
According to the release, the total construction project pipeline in China — as tracked by GlobalData, including all mega projects with a value above US$25 million — stands at US$3.2 trillion. The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 77.4 per cent of the pipeline value being in projects in the pre-execution and execution stages as of November 2019.
“The escalating trade tension between the U.S. and China is affecting China’s exports, thereby hurting its economy and manufacturing industries,” said Dhananjay Sharma, construction analyst at GlobalData, in a statement.
“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 U.S.”