CONSTRUCTION REPORT Ӏ EAST ASIA


CHALLENGES AND RISKS Persistent drag from the residential and real estate sector, with a decline in foreign direct investment and real estate investment, is expected to pose risks in the short to medium term. The sector faces increased domestic and international competition, potential cost overruns, and regulatory changes. To mitigate risk related to these challenges the government’s strategy is to leverage special bonds, digitisation, and large-scale policy tools to support further growth and innovation. Strategic focus areas include:


smart cities; environmental sustainability; and the integration of transportation with green energy.


THE JAPANESE CONSTRUCTION MARKET The Japanese construction industry is expected to grow by 1.6% in real terms in 2025,


bolstered by government and private sector investment, especially for the 2025 World Exposition in Osaka. Average annual growth is forecast at around 1.2% between 2026 and 2029. Private investment in non-


residential buildings grew 4.9% year- on-year in 2024, but the residential sector experienced a decline of 2.6% during the same period. Commercial construction has been one of the main growth engines and is expected to reach $71.3 billion in 2028, driven by investment in retail, offices, logistics, tourism, and data centres. This is further supported by government initiatives to revive the tourism sector, and significant projects in metropolitan areas. In addition, transport


infrastructure and regional connectivity are high government priorities, with output in this sector likely to reach $156.0 billion


ZOOMLION SATELLITE SUCCESSFULLY LAUNCHED


In August Chinese manufacturer Zoomlion announced the successful entry into orbit of the ‘Zoomlion’ corporate-named satellite which it claims to be the fi rst of its kind in the global engineering machinery sector. The company says the satellite launch marks its expansion from construction sites on earth to the


vastness of space, refl ecting its determination to accelerate digitalisation, intelligence, sustainability, and global reach, ensuring service access in even the most challenging environments. On a more practical level the satellite launch opens new possibilities for global service connectivity, from polar regions and deserts to offshore platforms. It also strengthens the integration of big data, IoT, AI, and satellite communications, supporting what Zoomlions calls ‘smarter, faster, and greener solutions worldwide’.


in 2028. This includes major upgrades to rail and road networks and urban redevelopment for the World Expo. Growth in the industrial


construction sector was marginal in 2024 due to subdued global demand. Future support, however, is expected to come from government investment in semiconductor supply chains and chip production subsidies. In the energy and utilities sector there is a moderate growth outlook (CAGR of 0.9%) through 2028. This is led by renewables, telecommunications, and utilities modernisation. In the residential construction sector there has been a gradual recovery in demand, with the market predicted to approach $161 billion by 2028 as new dwellings and detached home sales pick up.


FOSTERING RESILIENCE The 2025 World Exposition in Osaka was a short-term catalyst, with JPY164.7 billion ($1.3 billion) allocated for associated infrastructure and amenities. Government policies are designed to encourage resilience in manufacturing and supply chains, particularly through semiconductor sector subsidies and bolstered logistics capacity.


When it comes to institutional


construction (education, healthcare, R&D) this area has been growing at a CAGR of 2.2– 2.7%, benefitting from public and private investment in knowledge and research facilities.


CHALLENGES The industry faces persistent challenges, notably a severe shortage of skilled labour, which contributed to a drop in construction starts of 8.1% year-on-year in early 2024 and a decline in 2023. Rising construction costs and


project delays (such as seen on the 18 CRANES TODAY


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