BMI View: The long term outlook for Hong Kong's construction sector remains muted, with a structural slowdown in China as well as shortage of labour weighing on growth. Public construction works which were previously delayed and an increase in expenditure on public housing will offer some reprieve over the coming quarters.
Key Trends And Developments
We maintain our conservative outlook for Hong Kong's construction sector, as long term growth fundamentals remain weak, and forecast the sector to expand by an annual average of 2.8% in real terms between 2015 and 2020.
We believe near-term support for the sector will be primarily due to delays in the government's construction plans. There have been growing indications that the residential and railway infrastructure projects initiated by the government since 2010 are taking longer than expected to be implemented.
A focus by the government to provide affordable housing will also mean residential construction will provide some near term support to the sector.
Nonetheless, we believe the long-term outlook for Hong Kong's construction sector remains subdued relative to previous years, as the country's infrastructure and real estate markets are already very mature, leaving little room for greenfield opportunities.
In addition, China's economy has yet to experience the full extent of its growth deceleration and a deep slowdown in China's economic activity would have major implications to Hong Kong's construction sector. A labour shortage will also limit the growth of the sector.
The Hong Kong Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Hong Kong Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Hong Kong infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Hong Kong to test other views - a key input for successful budgetary and planning in the Hong Kong infrastructure market.
- Target business opportunities and risks in the Hong Kong infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Hong Kong.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.