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"Construction in Hong Kong - Key Trends and Opportunities to 2018" Published

Recently published research from Timetric, "Construction in Hong Kong - Key Trends and Opportunities to 2018", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 08/25/2014 -- The Hong Kong's construction industry recorded a CAGR of 14.90% during the review period. This was supported by private and public investments in infrastructural and industrial construction projects. The outlook for construction is favorable, as a result of the government's focus on infrastructure and residential construction. The continuation of several large-scale infrastructure projects, a prosperous tourism industry and increased government spending on healthcare and education will support industry growth. Government efforts to increase land supply for commercial and residential use will also drive the industry's growth over the forecast period. The construction industry's output is expected to record a nominal CAGR of 8.87% over the forecast period.

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Report Highlights:

- The construction industry recorded healthy growth during the review period, primarily driven by construction of infrastructure projects announced by the government under its Policy Address in 2007. According to the Census and Statistics Department (C&SD), the gross value of construction works performed by private and public contractors increased from HKD32.9 billion (US$4.2 billion) in the first quarter of 2013 to HKD34.6 billion (US$4.5 billion) in the first quarter of 2014 in real terms. The industry is expected to grow over the forecast period due to an influx of new construction projects in Hong Kong, as the government is committed to enhance Hong Kong's economic development through infrastructural development. In nominal terms, the construction value add in Hong Kong reached HKD76.9 billion (US$9.9 billion) in 2013, after registering a review-period CAGR of 11.21%, and is projected to reach HKD10.9 billion (US$14.1 billion) by 2018, after registering a forecast-period CAGR of 7.23%.

- Hong Kong is one of the largest recipients of direct investment from China. According to the C&SD, in 2012 China contributed 37% of total investments in Hong Kong. However, the slowdown in the Chinese economy resulted in reduced investment and capital inflows into Hong Kong, which affected growth in the construction industry. There is shortage of skilled construction workers in Hong Kong: according to the Hong Kong Construction Association, around 20,000 extra workers are required to handle the current workload in the construction industry, in order to prevent an increase in costs. To meet this shortfall, the government is planning to renounce its rule on the import of foreign labor. The proposed rule will allow the Labour Advisory Board to import foreign workers for a particular project if no local worker is available for that vacancy.

- According to the Tourism Commission, the number of visitors to Hong Kong in 2013 reached to 54.3 million, indicating an increase of 11.7% compared to 2012. According to the Commerce and Economic Development Bureau of Hong Kong, tourism contributes 4.5% to Hong Kong's GDP and employs 230,000 citizens. The bureau estimates that Hong Kong will receive 70 million visitors by 2017 and the bureau plans to develop tourism-related infrastructure to handle the rising number of tourists. Moreover, in 2014 budget, the government allocated additional funds of HKD95 million (US$12.2 million) for the Hong Kong Tourism Board, which includes HKD50 million (US$6.4 million) to introduce new elements in popular events, such as using 3D projection mapping to show the night view of Victoria Harbour and HKD45 million (US$5.8 million) for the promotion of exhibitions. Initiatives such as these are likely to attract visitors to Hong Kong, increasing investments in the leisure and hospitality industry over the forecast period.

- Hong Kong International Airport (HKIA) is one of the world's busiest cargo gateway and passenger airports. It handled 59.9 million passengers and 4.1 million tons of cargo in 2013, and is likely to reach full capacity in coming years. According to the International Air Transport Association, HKIA is projected to receive 102 million passengers and 8.9 million tons of cargo by 2030. To handle the growing capacity, the airport authority has decided to construct a third runway. The project secured approval in 2014 and is expected to be operational in 2023. Over the forecast period, the growth in other infrastructure categories is expected to be driven by the airport's expansion.

Companies Mentioned in this Report: Sun Hung Kai Properties Ltd, Kerry Properties Ltd, Poly Property Group Co., Ltd, Cheung Kong (Holdings) Ltd, NWS Holdings Ltd

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