DUBLIN–(BUSINESS WIRE)–The “China Construction Industry Databook Series – Market Size & Forecast by Value and Volume (area and units) across 40+ Market Segments in Residential, Commercial, Industrial, Institutional and Infrastructure Construction, Q1 2022 Update” report has been added to ResearchAndMarkets.com’s offering.
According to the publisher’s Q4 2021 Global Construction Survey, construction industry in China is expected to grow by 9.7% to reach CNY 9,509 billion in 2022.
Despite near-term challenges in certain construction sectors, medium to long term growth story in China remains intact. The construction industry in China is expected to grow steadily over the next four quarters. The growth momentum is expected to continue over the forecast period, recording a CAGR of 5.6% during 2022-2026. The construction output in the country is expected to reach CNY 11,807.5 billion by 2026.
The slowdown in the Chinese construction sector results in declining economic growth
Due to the effect of the global pandemic, construction activities have slowed down in the country. This has resulted in a fall in the growth rate of its economy. The economic growth rate has declined from 7.9% in Q2 2021 to 4.9% in Q3 2021. Based on the government data, investment in the Chinese construction sector also experienced a decline in Q3 2021 when compared to Q2 2021.
The construction sector output during Q3 2021 remained relatively unchanged in China, growing by just 0.2%. The publisher expects that the slowdown in the construction sector is also caused by tighter regulations that have been imposed by the regulators on borrowing by developers.
The Chinese conglomerate, Evergrande Group, is currently struggling to avoid defaulting on billions of US dollars owed to bondholders.
As a result of the regulatory crackdown, other large private developers might also face a similar situation. Consequently, in light of the current situation in the Chinese construction sector, the publisher expects the near-term outlook of the construction sector to remain challenging because of the uncertainties relating to the Evergrande debt problems.
Chinese authorities are loosening restrictions on home approvals and lending to avoid industry collapse
With the construction industry is facing many operational challenges, authorities have started to loosen restrictions on home approvals and lending to avoid a complete collapse. According to the publisher’s Q4 2021 Global Construction Market Survey, in China, bank credit is being offered to property firms much higher than in any period during Q2 2021 and Q3 2021. Notably, mortgage lending in China increased by more than US$30 billion (200 billion yuan) in October 2021 from around US$23 billion (150 billion yuan) in September 2021.
Approvals for home sales and property loans are gaining momentum in Chengdu, the capital of the southwestern province of Sichuan. Moreover, restrictions on using proceeds from pre-sales have also been eased in the region. The Chinese Government is looking to ensure that there is enough liquidity to maintain construction in the property sector. Consequently, the publisher expects loosening restrictions to support the market growth in the next six to eight quarters.
Stability in the credit market to boost local government funding in infrastructure projects
Infrastructure construction activities have slowed down since Q3 2021. The publisher projects the higher interest costs faced by the local Government when issuing bonds to fund infrastructure projects to be the primary reason behind the slowdown in the infrastructure construction project. However, as the credit market becomes more stable, the publisher expects local government funding to start normalizing. From the near-term perspective, the publisher anticipates local governments to start funding infrastructure projects, such as renewable energy, transport, 5G network, and other advanced technologies.
China Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by:
China Infrastructure Construction Sectors: 10- year market size & forecast in value terms by:
For more information about this report visit https://www.researchandmarkets.com/r/9volzh
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