Construction Year In Review & Forecast

Hong Kong’s construction industry has been heading in a positive direction in 2017, relative to its performance in 2016. The rebound in gross value of construction works can be attributed to a large number of government-led construction such as Hong Kong Airport’s expansion, Guangzhou–Shenzhen–Hong Kong Express Rail Link (XRL) and Hong Kong–Zhuhai–Macao Bridge (HZMB). As the economy picks up pace, construction commencements have remained strong in 2017 and are projected to further improve in 2018. In particular, the community sector had a good performance although it had a dip in the third quarter due to a lack of projects. It nevertheless finished strong, with one of the major projects being the CUHK Medical Centre. For the upcoming year, a continuation of the government’s hospital development programme should promote construction in this category. Although Hong Kong has been suffering from a serious shortage of land for development and trying to cope with increasing housing demand, constant commencements of large-scale projects have helped the residential sector to maintain a good performance that started in 2016. There are concerns of a housing ‘bubble’, yet demand remains strong from mainland investors and local owner occupiers. In accordance with the Chief Executive’s 2017 Policy Address, the government’s focus on land supply and housing development ensures that the residential sector will remain a major contributor to the construction industry in the coming years.