Construction in China – Key Trends and Opportunities to 2017

Published: April 2013
No. of Pages: 81
    ReportsandReports

Synopsis

This report provides detailed market analysis, information and insights into the Chinese construction market, including:

  • The Chinese construction market’s growth prospects by sector, project type and type of construction activity
  • Analysis of equipment, material and service costs across each project type within China
  • Critical insight into the impact of industry trends and issues and the risks and opportunities they present to participants in the Chinese construction market
  • Assessment of the competitive forces facing the construction industry in China and profiles of the leading players
  • Data highlights of the largest construction projects in China

Summary

China’s overall construction industry will continue to expand in the next five years, but the pace of growth will slow. The construction industry valued at CNY13.5 trillion (US$2.1 trillion) in 2012, recording a CAGR of 21.5% during the review period, but it is expected to grow at a CAGR of 12.4% over the forecast period. In the short term there could be some weaknesses due to the government’s stringent property market curbs. The government published new rules in March 2013 amid growing speculation of further price rises. According to the new rules, homeowners selling their homes will receive an income tax of 20% on capital gains. The rules could discourage market speculation and also home sales in the short term.

Scope

This report provides a comprehensive analysis of the construction industry in China:

  • Historical (2008-2012) and forecast (2013-2017) valuations of the construction market in China using the construction output and value-add methods
  • Segmentation by sector (commercial, industrial, infrastructure, institutional and residential) and by project type
  • Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
  • Analysis of key construction industry issues, including regulation, cost management, funding and pricing
  • Assessment of the competitive environment using Porter’s Five Forces
  • Detailed profiles of the leading construction companies in China

Reasons To Buy

  • Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
  • Assess market growth potential at a micro-level via 600+ time series data forecasts
  • Understand the latest industry and market trends
  • Formulate and validate business strategies by leveraging our critical and actionable insight
  • Assess business risks, including cost, regulatory and competitive pressures
  • Evaluate competitive risk and success factors

Key Highlights

  • Economic growth is expected to be more balanced in 2014–2015, due to an expected recovery in external demand and strengthening household consumption. Underlying this forecast, is the assumption that the global economy strengthens and the government’s policy measures to boost consumption gain traction.
  • Inflation is expected to pick up in line with a faster pace of economic growth. Aggregate financing of the economy reached an all-time high of CNY2.54 trillion in January 2013. Abundant food supply is expected to help contain consumer price inflation, and the government will intervene should consumer prices rise too fast. Average inflation for 2013 is expected to rise to 3.4%, marginally below the newly announced official target of 3.5%.
  • Prospects for the construction sector are bright over the forecast period, with annual growth set to average above 10% until 2016. This is due to the country’s immense need for greater housing supply and better infrastructure networks to cater for rapid, large scale urbanization. 10 million workers migrate from rural areas to urban centers every year.
  • Infrastructure construction is expected to record strong growth, as investment in railway construction has resumed its rapid pace after a temporary moderation following a major incident in 2011. The government is expected to encourage infrastructure investment; it is likely that export growth will remain subdued and restrictions on the residential property market will continue.
  • There are some risks in construction. The government’s unwavering stance on the continuation of property market restrictions, which is essential for the market’s long-term sustainable growth, may discourage home sales and thus the pace of property development. Given the huge stock of on-going projects (430,000 hectares) and an excess in newly started projects (130,000 hectares) relative to home sales (98,470 hectares) in 2012, new project commencement is expected to be at a more moderate pace in 2013.

Published By: Timetric
Product Code: Timetric605


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