Cleveland, Ohio -- Construction expenditure in China is expected to rise 9.4 percent per annum in real terms through 2015, moderating from the rapid pace of 2005-2010, according to US market research group Freedonia.
Growth will be bolstered by an expanding domestic economy, ongoing urbanisation and industrialisation, rebounding foreign investment funding, continuing efforts to expand and upgrade physical infrastructure, and rising income levels, Freedonia said.
The three major construction segments -- residential, nonresidential and non-building structures -- each accounted for about one-third of total spending in 2010. These and other trends are presented in Construction Outlook in China, a new study from the Beijing office of the Cleveland-based industry research firm.
The non-building construction sector will advance 10.1 percent a year in real terms through 2015, with government spending the predominant drivers here. State-led efforts to expand and upgrade the country's transport infrastructure in highways, railways, subways, and airports will aid growth, as will construction of utilities.
China's government needs to continue to increase the country's power generation capacity and improve electricity transmission networks, as well as expand and improve municipal water supply coverage and gas distribution.
Freedonia expects spending on residential buildings to grow at 9.7 percent a year through 2015, supported by rising personal income and continuing population migration to urban areas. Her the government is pushing construction of affordable, low-rent houses in urban areas and subsidies for renovation in rural areas.
Non-residential construction spending will rise 8.3 percent per year through 2015, says Freedonia. Growth will be strong in commercial and office building, but moderation in growth in manufacturing will put a brake on non-residential building construction
Construction spending in China
China % annual growth in construction spending (billion 2000 yuan)
Item 2005 2010 2015 growth growth
Construction spending 4003 9076 14200 17.8 9.4
Residential 1343 3053 4850 17.9 9.7
Non-residential 1432 3148 4690 17.1 8.3
Non-building 1228 2875 4660 18.5 10.1
Construction Outlook in China (published 07/2011, 237 pp) is available for $5400 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326, or see www.freedoniagroup.com.