Research Briefing | Oct 24, 2023

Weakened confidence forces building activity downwards in China

We have slightly upgraded our forecasts over the short run, with total construction work done forecast to decline 5.4% in 2023 and 2.6% in 2024 (up from a previous -5.5% and -5.1% respectively). However, we have downgraded our forecasts over the medium to long term, with total construction work done forecast to grow 4.5% p.a. over the three years to 2027 (down from a previous +7.2%).

What you will learn:

  • Residential building work done is forecast to decline 10.4% in 2023 and 4.8% 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 levels more muted.
  • Non-residential building work done is forecast to pare back 16.9% in 2023 and 5.2% in 2024. The decline will be led by ‘other non-residential’ and industrial building, pulled down by a cooling in external demand. Nonetheless, crucial support will stem from commercial building as a lack of new supply over recent years will see demand slowly return.
  • Civil engineering work done is forecast to grow 8.4% in 2023 and 0.4% in 2024. Government investment in infrastructure projects will continue to support the ailing real estate sector. 
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