Ongoing urbanization and industrialization, rebounding foreign investment funding, rising personal
income levels, and further population and household growth will all work to drive gains.
Expenditures to increase
8.8% yearly through 2016
Construction expenditures in China will
rise 8.8 percent per annum in real terms
through 2016. Although growth will decelerate
from the rapid 2006-2011 pace,
the country will continue to out-perform
other major national construction markets.
Ongoing urbanization and industrialization,
rebounding foreign investment
funding, rising personal income levels,
and further population and household
growth will all work to drive gains. However,
further growth will be prevented by
a slowdown in the Chinese economy
through the forecast period, especially in
fixed asset investment.
Nonbuilding sector to
remain fastest growing
Construction expenditures in China are
about equally split among the residential
building, nonresidential building, and
nonbuilding construction segments, each
of which accounted for around one-third
of construction spending in 2011. Nonbuilding
construction will be the fastest
growing segment through 2016. Growth
will benefit from state-led efforts to raise
and upgrade the country’s transportation
infrastructure, which includes a national
high-speed railway and the “7918
Network” national highway system.
Residential building construction will
advance at an 8.5% annual rate through
2016, primarily fueled by rising personal
income levels, household growth, and
continuing urbanization. Government
efforts to improve living conditions for
low-income earners (including the construction
of affordable, low-rent houses
in urban areas and subsidies for alterations
of dilapidated farmhouses in rural
areas) will also help spur gains in residential
building construction spending.
Nonresidential building construction expenditures
will post the slowest gains in
real terms through 2016. Advances will
be driven by robust gains in consumer
spending -- both in China and abroad --
for Chinese manufactured goods and
services. These increases will spur
domestic and foreign direct investment
in plants, commercial buildings, warehouses,
and shopping complexes.
Northwest region to lead
market gains
Although China is a single country, it
consists of numerous distinct regional
markets characterized by different
climates, populations, and levels of
economic development. Construction
expenditures in the Northwest region are
expected to register the fastest gains of
any region in China, benefiting from the
government’s “Great Western Development”
strategy, which will result in
sizable increases in spending on infrastructure
and manufacturing facilities in
this area. However, the Central-East will
remain home to about 30 percent of the
country’s total population and 37 percent
of its economic output, supporting a vast
construction market that will account for
42 percent of overall spending on construction
in China in 2016. Gains in the
Central-East will be led primarily by
growth in residential building construction,
benefiting from the high personal
income levels in the region.
Study Scope
This study analyzes the 10.8 trillion yuan construction industry in China. It presents historical demand data for the years 2001, 2006 and 2011 with forecasts for 2016 and 2021 by construction type (residential building, nonresidential building, nonbuilding) and region (e.g., Central-North, Northeast, Central-East).
The study also considers market environment factors, details industry structure, evaluates company market share and profiles 38 industry participants, including China State Construction Engineering, China Railway Group and China Railway Construction.
