September 3, 2013
China's total construction expenditure in 2012 exceeds US$1.25 trillion
Asia is tipped to be the world's fastest growing construction market between now and 2020, with Indonesia and in particular Jakarta forecast to have the highest potential in terms of both market growth and profitability.
Construction spending in Asia is forecast to account for almost one half of total global construction spending by 2020. Recent rapid growth in the region has largely been at the expense of declines in both Western Europe and North America, according to the latest Asia Construction Outlook report launched by Aecom and Davis Langdon, an Aecom company.
| Highlights of the analysis: |
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Asia will be the world's fastest growing construction region between now and 2020. While Western economies have slowed, Asia has maintained strong growth and has been less impacted by the global economic downturn in recent years. Asia has also become increasingly dependent on domestic demand, through burgeoning affluence and urbanization, for its continued growth. Asia is the largest regional construction market worldwide, accounting for some 40% of global construction spending in 2012. Indeed, construction spending in Asia is forecast to account for almost one half of global construction spending by 2020. |
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Growth in India depends on its ability to attract private finance. Given its population size comparable to that of China, India offers a significant level of opportunity, however, its construction sector is only about one-third the size of the China market. With public investment levels likely to be constrained, India's growth will greatly depend on its ability to attract private finance. |
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Indonesia is identified as a strong potential growth market after China. China accounts for some 41% of the Asia-Pacific region's total construction spending, with expenditures of US$1.25 trillion last year. In addition, Indonesia emerges as a particularly interesting market. Construction spending in the world's fourth most populous country accounted for more than a quarter of the nation's GDP in 2012, with around half of this expenditure funding infrastructure projects. The survey also found that Jakarta, the capital of Indonesia, is viewed as the number one city in the region for potential market growth and profitability. |
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New spending and funding trend in the construction sector identified. Construction activities will shift away from non-residential structures and, instead, move towards infrastructure and then, in the longer term, to residential projects. Funding models are also evolving in Asia, with growing use of private finance, including public-private partnerships (PPP). |
A new generation of office buildings is booming in China
Nan Fung Place, Pazhou, Guangzhou
Designed by Aedas
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