Northeast Asia construction growth to slow to 2.4% in 2023, forecasts GlobalData 

Construction activity is expected to slow across much of Northeast Asia this year, with the continued weakness in the real estate sector in China being the most significant drag on growth in the region. As a result, GlobalData, a leading data and analytics company, has revised its forecast of Northeast Asian construction output from its prior projection of a 3.8% annual growth to a growth of 2.4% in 2023.
May 5, 2023
By Guy Woodford
A cement plant in Shuangyang, Jilin province. The facility is in the portfolio of part-CRH-owned Yatai Cement, and is the largest cement plant in northeast China

GlobalData's report, "Construction Market Size, Trends and Growth Forecasts by Key Regions and Countries, 2023-2027," reveals that the growth of the North-East Asian construction industry is forecast to pick up to an expansion of 3.3% in 2024, as the downturn in the Chinese real estate sector begins to ease.

Willis Rooney, Economist at GlobalData, comments: "Construction output growth in China is expected to slow to an expansion of 2.7% this year, weighing on the regional growth, with growth elsewhere expected to remain relatively weak. This year's significant risks to construction activity in the region include the continued weakening of activity in the Chinese residential sector. Real estate investment in China declined by 8.4% last year and continued to slow in the first quarter of this year, falling by 5.8% in Q1 2023. Real estate investment is expected to decline again this year, though the decline will be less pronounced than in 2022." 

Further risks to the region's outlook include the continued weakness in the South Korean construction industry, with weak external demand and a slowing of consumption growth likely to weigh on new investment in the short term.

Rooney concludes: "The construction industry in South Korea registered a marginal growth of 0.2% in real terms last year, following four successive years of decline. The industry's growth was constrained by the impact of multi-year high rates of inflation, the aggressive unwinding of monetary support by the Bank of Korea and the slowing global economic growth on new construction demand. These factors are expected to continue to weigh on the construction activity in South Korea this year, though full-year growth will pick up to a marginal expansion of 0.8%." 

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