According to a new report by Timetric, construction activity in China is set to continue to grow at a fast pace, despite concerns over 'ghost cities' and the indebtedness of local governments. The annual gross output value for China’s construction industry reached US$2.6 trillion in 2013, up from just US$200 billion in 2000, indicating rapid growth over the last decade or so. Timetric predicts that the annual gross output value will reach around US$3.9 trillion by 2018, with around 8% of annual average growth in real terms.
“This buoyancy reflects a number of factors: continued rapid urbanisation and industrialisation, population growth, rising household incomes and government investment in expanding and upgrading physical infrastructure,” Danny Richards, Analyst at Timetric's Construction Intelligence Centre. “There are numerous mega-projects in development in the areas of transport infrastructure, city subways, airports, utilities and waste management, as well as power generation.”
Residential construction market
The report notes that the value of investment in new buildings has grown exponentially over the last few years. In 2013, total investment in real estate development reached US$1.3 trillion, of which residential buildings investment stood at US$910 billion, commercial at US$185 billion and office buildings at US$72 billion. A decade ago, annual investment in all new buildings was just around US$135 billion.
According to Timetric, urbanisation has emerged as a national priority. The National New-type Urbanisation Plan (2014-2020), released in March 2014, set the target of having 60% of the population living in cities by 2020, up from below 54% currently.
“This plan shows the need for further investment in urban infrastructure such as new expressways and railways to link all cities with more than 200 000 people by 2020, and high-speed rail services to connect cities with more than a half million,” said Richards. “China also needs to invest in public-funded affordable housing projects. To provide 23% of the urban population with affordable housing by 2020, more than 4 million new housing units need to be built every year up to 2020.”
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/asia-pacific-rim/14112014/chinas-construction-market-will-continue-to-grow-858/