Hong Kong’s Construction Industry Key Trends and Issues:
- Since 2010, Hong Kong’s construction industry has shown strong levels of growth. This was driven by public investment and the expansion plans of private developers to meet housing sector demand.
- Analysed by District Council, construction on Hong Kong Island, Kowloon and New Territories grew in 2012. This indicates that the government is prioritizing development in newer regions.
- Hong Kong has several leading financial institutions and the largest number of corporate headquarters in Asia. It is an attractive business hub due to its low tax rates, free economic structure and connectivity to markets across the world. The nation’s competitive advantage in terms of business attractiveness is expected to stimulate investment inflow into the office buildings category.
- Hong Kong intends to become an education hub for the Asian region. Higher education has been prioritized and the government launched an endowment fund in 2009 comprising HKD18 billion to promote research in higher education institutions. Considering the long-term benefits of educational investment, the government is spending nearly one-fourth of its total budget expenditure on this area. Investments in higher education are expected to drive the expansion of the institutional construction market over the forecast period.
- Infrastructure construction is expected to benefit from several large-scale infrastructure projects. At a cost of US$46 billion, the projects are designed to enhance connectivity across the country.
- The contribution of industry to economic growth in Hong Kong has been declining, with the country relocating lower-value added manufacturing activities to Mainland China and transitioning itself into a services-based economy. The country’s main industrial activity comprises the manufacture of fast-moving consumer goods (FMCGs). Compared to other markets, the industrial construction market is expected to receive a lower level of investment over the forecast period.
- As life expectancy continues to rise, there has been an increased emphasis on the care of senior citizens. In the 2013 budget, the government increased its allocation to day care facilities and subsidized housing for the elderly. These dedicated allocations are expected to support the expansion of low-cost social housing.
- The nation’s low crime rate, cosmopolitan nature and well-developed transport infrastructure have propelled the growth of tourism. This will drive the expansion of commercial construction over the forecast period.