China: Construction Outlook

What you will learn:

• We forecast total construction work done to decline 3.3% in 2024 (up from a previous -5.6%). The smaller decline is largely due to historical revisions made by China National Bureau of Statistics which point to less robust civil engineering construction activity over 2022 and 2023. Still depressed confidence and insufficient demand for building will continue to weigh on the sector. The introduction of some policy measures will act to curb some of the declines in the real estate sector. Civil engineering activity is expected to pull back slightly, as government fiscal policy transitions towards “high quality’ economic development. Nonetheless, the government will remain supportive in accelerating infrastructure projects already in the pipeline.
• Residential building work done is forecast to decline 2.5% in 2024. The sector remains weakened by the downturn in the real estate sector. This will see activity remain at lower levels over the near term. While policy easing will help the recovery, the state induced property correction will keep activity at structurally lower levels.
• Non-residential building work done is forecast to fall back 21.6% in 2024. The decline will be led by ‘other non-residential’ and industrial building, pulled down by a cooling in external demand.