Across Asia, the construction landscape is being reshaped by a mix of public investment, industrial expansion, and structural headwinds that vary widely between markets. China continues to surge, fuelled by billions in new infrastructure, energy and high-tech manufacturing projects, while Taiwan’s long-term growth is anchored by offshore wind, transport upgrades, and booming semiconductor linked construction. Japan and Hong Kong are seeing steadier, government-led progress, with major housing and transport programmes underpinning activity despite labour shortages and soft private demand.
In contrast, South Korea is in the midst of a severe contraction driven by weak residential markets, political uncertainty, and high construction costs – though policymakers hope that major investment in semiconductors, transport and energy will set the stage for recovery beyond 2026…
THE CHINESE CONSTRUCTION MARKET
The Chinese construction industry is projected to grow by 3.2% in 2025, powered by robust activity in the infrastructure, energy, and utilities sectors; these sectors are forecast to see growth of 5.6% and 6.9%, respectively, in 2025. Major new project launches and surging investment mark this surge, with 182 major projects commenced in Q1 2025 totalling CNY340 billion ($47.4 billion), a 39.1% increase year-on-year compared to 2024. Notable among these are highspeed rail and expressway projects, as well as major investments in high-tech manufacturing facilities and AI science parks.
In 2024, similar trends led to a 4% growth in real terms, with immense government investments: over CNY1.2 trillion ($167.5 billion) in renewable energy, CNY569 billion ($79.4 billion) in water conservation, and CNY337.3 billion ($47.1 billion) in railway projects in the first half of the year.
SECTOR PERFORMANCE
Infrastructure development has been key to growth. This includes investments in roads, bridges, railways, water conservancy, and urban transit.
When it comes to the energy and utilities sectors, these have been bolstered by renewable and traditional energy projects with the government’s commitment visible in expansive funding rounds.
China’s industrial construction sector grew by 6% in 2024. The country has become a leader in global auto manufacturing and export, with additional growth driven by EV battery plant investments.
Weakness persists in the residential construction sector, however, with investment in this sector having fell by over 10% year-on-year in early 2024. The government announced a CNY300 billion affordable housing loan to stabilise the sector.
Institutional sectors, such as healthcare, education, and R&D, are being expanded aggressively by public funds, and growth rates above 5% annually through 2025–2028 are expected.
YEAR-ON-YEAR GROWTH
In 2023, 25 out of 31 provinces recorded year-on-year construction output growth; regions such as Tibet, Liaoning, Xinjiang, and Guangdong saw 9–12% increases.
Urbanisation remains a long-term driver, with large city populations requiring new infrastructure and building stock.
Major industry players like China Communications Construction Co. and China State Construction International Holdings are focusing on technological innovation, green energy, and “smart+” solutions, leveraging big data and new construction technologies.
Chinese companies remain globally competitive, with a strong presence in infrastructure contracting, transport integration, and engineering.
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 nonresidential buildings grew 4.9% yearon- 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 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 Nakano Sun Plaza Redevelopment) further pressure margins and delivery timelines.
Export slowdown and fluctuations in demand for industrial buildings may weigh on short-term sector growth.
LANDMARK DEVELOPMENTS
Japan is seeing landmark urban developments like the 390-metre ‘Torch Tower’ in central Tokyo, set for completion in 2027, which reflects ongoing high-value commercial and mixed-use projects.
The construction materials market is expected to grow robustly (CAGR of 4.0% over 2023–28), driven by the demand from large metro projects and the ongoing replacement and refurbishment of older buildings.
THE SOUTH KOREAN CONSTRUCTION MARKET
The South Korean construction industry is facing significant headwinds. It is forecast to contract by 6.2% in real terms in 2025, following several years of declines –making 2025 the steepest contraction in over 26 years.
Contractions in 2024 and 2025 are attributed to falling building permits, political uncertainty, rising construction costs, high household debt, and a sluggish housing market.
In Q1 2025, construction production fell by 20.7% year-onyear, marking the fourth straight quarterly decline and the sharpest fall since the 1998 financial crisis.
WEAK DEMAND
In the residential sector building permits dropped sharply – 30.6% in 2023 and over 11% in early 2024.
Weak residential demand and tighter housing markets are blamed as major drags on the industry.
The commercial and industrial sectors are similarly affected by a reduction in new building orders and external demand, with additional pressure from high material prices and interest rates.
Infrastructure, however, is a rare bright spot, with the sector expected to grow by 7.6% in real terms in 2024. Key infrastructure projects (such as the Daejeodaegyo Bridge) are moving forward with government backing, and transport infrastructure remains a priority.
When it comes to the energy and green transition the government targets carbon neutrality by 2050, which is expected to drive investment from 2026 onwards, though current figures show a slowdown and cancellation of key projects (e.g., hydrogen power).
POLITICAL INSTABILITY
Short-term performance is hindered by political instability, including events such as former President Yoon Suk Yeol’s brief martial law declaration in 2025.
The government is investing heavily in support of semiconductor, AI, battery, and renewable energy industries. A KRW50 trillion ($34.4 billion) fund for 12 major sectors – including construction-enabling industries – aims to stabilise and re-energise the market.
Trade policy uncertainty, such as possible US tariffs, also weighs on market sentiment, affecting large project viability and exports.
Despite contraction in 2023– 2025, the market is expected to return to growth, with average growth rates of 2.6–2.8% annually from 2026 to 2029, supported by continued investment in infrastructure, transport, housing, and semiconductors. Easing of housing redevelopment rules and targeted support for advanced manufacturing are longer-term positives.
THE TAIWANESE CONSTRUCTION MARKET
The construction industry in Taiwan is set for continued steady expansion. It’s expected to grow by 3.1% in real terms in 2025 and post an average annual growth rate of 4.1% from 2026 to 2029.
Growth is driven by robust investments in renewable energy, transport infrastructure, manufacturing, and an improvement in export activity.
LARGE INVESTMENTS
Renewable energy has seen largescale investments – such as the Hai Long offshore wind project (TWD117 billion/~$3.8 billion) – which are central to Taiwan’s netzero by 2050 ambitions. Only about 11% of the country’s electricity, however, was from renewables by the end of 2024. This was short of government targets. When it comes to transport and infrastructure, rail and road projects are in the spotlight. Signature projects like the Miaoli Formosa 4 Offshore Wind Farm (4.4GW), Taipei–Yilan Direct Railway Line, and upgrades to water production and supply (e.g., a large Taoyuan water facility) reflect both public and private sector commitment.
The institutional construction sector is projected to grow by 2–3.7% annually, supported by substantial planned government spending on education and healthcare facilities (e.g., a proposed 8.3% budget boost for Ministry of Education in 2025).
With regards to residential and commercial sectors, the residential sector is expected to grow at around 3% per year, aided by housing demand, redevelopment, and a stable flow of new licenses, while the commercial and industrial sectors are supported by the ongoing tech and semiconductors boom.
INDUSTRY MAKEUP
Taiwan’s construction market includes over 20,000 companies (2024), with a growing mix of A, B, C-class builders, and civil engineering contractors. Employment in the sector showed consistent growth – up 1.4% year-on-year in the first nine months of 2024.
PROJECT PIPELINE
Taiwan’s construction project pipeline includes mega projects worth $237.1 billion, with a strong bias toward projects already in execution.
Potential headwinds, however, include supply chain disruptions, rising material and labour costs, and the impact of global tech cycles on semiconductor-driven construction.
There’s active government support for infrastructure and climate goals, and rising lending to the construction sector. This signals confidence in the industry’s sustainability and growth through the decade.
INVESTMENT ANCHOR
After an estimated 10.8% real growth in 2023, the construction market faced a modest contraction of 1.2% in 2024, linked to inflation, high interest rates, and restrained private sector demand. Growth is projected to resume, with a 0.7% increase expected in 2025 and a 2.3–2.6% annual average through 2028–2029.
Government investment remains the anchor with annual public infrastructure spending remaining consistently above HK$100 billion. The government has set ambitious targets like supplying 440,000 housing units over 10 years and major long-term projects such as the Northern Metropolis development.
SECTOR STRATEGY
With regards to transport and Infrastructure major drivers include three strategic railway projects, three new road schemes, and major utility upgrades.
Infrastructure output is set to grow to US$7.4 billion by 2028, as public investment pushes forward long term urban development.
Addressing Hong Kong’s housing deficit is a top government priority. Despite subdued demand and only a slight effect from policy relaxation (like stamp duty removal), public projects and affordable housing supply are in focus.
For the commercial and industrial sectors, commercial construction is expected to grow strongly (CAGR 4.5% to US$9.5 billion by 2028), while industrial construction is supported by increased manufacturing and public sector investment. Landmark industrial projects include new waste management facilities and data centre developments.
There has been steady investment in education, healthcare, and research infrastructure continues to underpin growth in the institutional segment (estimated US$2.8 billion by 2028).
CHALLENGES AND RISKS
Private development is sluggish, with developers remaining cautious and a drop in new project starts – a situation only partly offset by public sector resilience.
The construction industry faces persistent issues including labour shortages, rising material costs, and regulatory complexities.
The overall outlook remains clouded by economic and market uncertainty, global economic pressures, and a subdued real estate/finance market.
The government’s “Northern Metropolis” initiative is among the most significant ongoing urban development strategies.
The construction project pipeline is robust, with sustained activity in public housing, education, utilities, and green infrastructure (e.g., waste-toenergy plants, integrated recycling centres).
FINAL OVERVIEW
In conclusion, we see China and Taiwan experiencing stable-toaccelerating construction growth, fuelled by public investment in infrastructure, high-tech manufacturing, and renewable energy. The Chinese government’s strategic focus on infrastructure, technology, and energy shifts is matched by Taiwan’s large-scale transport and offshore wind initiatives.
Japan and Hong Kong are enjoying modest, governmentled growth, with their short-term expansions heavily reliant on major public projects (such as Osaka’s World Expo in Japan and transport/housing initiatives in Hong Kong), but facing private sector caution and the need to address skilled labour shortages.
South Korea is currently in a downturn, with the worst construction sector contraction in over two decades due to high interest rates, falling permits, political instability, and a sluggish housing market. Recovery is expected post-2026, driven by semiconductor, infrastructure, and energy investments
XCMG CLAIMS EUROPEAN GROWTH STRATEGY IS GAINING TRACTION WITH INCREASED REGIONAL TRUST
Chinese crane manufacturer XCMG Machinery showcased its latest fuel-e_ cient and low-emission cranes for the European market at industry events this summer. The company debuted its XCA60_ EV hybrid all-terrain crane at Vertikal Days in the UK, at France’s JDL Expo, and at GIS in Piacenza, Italy – all in September. Also at GIS, XCMG also debuted another Europe-specifi c model: the XCR50_E rough-terrain crane.
“XCMG is committed to supporting sustainable and intelligent infrastructure development across Europe,” says Sun Jianzhong, vice president of XCMG Construction Machinery and general manager of XCMG Crane. “’Rooted in Europe, Dedicated to Europe’ is both our strategic focus and our commitment to customers and the environment.”
According to XCMG the strategy is already gaining traction, with the company claiming bulk orders from customers in Germany, France, the Netherlands, and other European markets. This, it says, underscores growing regional trust in the company’s lifting equipment and solutions.
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’.
HSC INTRODUCES THE UPDATED SCX800A-3
Sumitomo Heavy Industries Construction Cranes Co. (HSC) has updated its SCX800A-3 crawler crane with a new moment limiter system and other safety features.
It has a new moment limiter with a large 12.1-inch touchscreen. The display has an operator interface with new live readouts of counterweight specifi cation, ground contact pressure, list and trim indicator.
As a new option for the European market there’s a surround view system, called Argus, that merges and displays images from multiple cameras. The system allows operator to check surrounding conditions from a bird’s-eye view.
To ensure that workers can safely work on the crane, handrails on the catwalks have been standardised and access to the machine improved, says HSC.
The crane is equipped with Cummins B6.7 engine that meets EU Stage V emission standards for the high levels of clean running performance, together with an advanced control system (ECO winch mode, auto idle stop function) for energy-e. cient operation. The engine can also run on biodiesel and other Bio Diesel Fuel (BDF; B20) or Hydrotreated Vegetable Oil (HVO).
DENZAI AND HIAP HENG FOCUS ON SINGAPORE MARKET
Japanese heavy lifting and transport specialist Denzai has signed a Memorandum of Understanding (MOU) with Hiap Heng Heavyequipment Co. to jointly pursue opportunities in the Singapore market.
Hiap Heng, founded in Singapore in 1983, offers rough terrain and all terrain cranes up to 350 tonnes, a fl eet of heavy transport equipment, lorry cranes, and mobile elevated work for a wide variety of jobsites.
“Singapore is entering a new era of infrastructure development that will defi ne the city’s future,” says Kohki Uemura, President & CEO, Denzai. “By combining Denzai’s global heavy lifting expertise and equipment with Hiap Heng’s trusted fl eet… we can offer comprehensive solutions that cover the full spectrum of construction needs. Together, our teams and our people bring the strength, precision, and reliability to support Singapore’s most ambitious projects, today and in the years ahead.”
TADANO CONTINUES EXPERTISE EXPANSION
In July Tadano announced the completion of its acquisition of the transportation system business of IHI Transport Machinery Co., a subsidiary of Tokyo, Japan-headquartered engineering business IHI Corporation.
With the move Tadano can now utilise IHI Transport Machinery’s engineering expertise in the jib climbing crane, port and large offshore crane, wind power crane, and bulk handling systems sectors.
“This acquisition is a key step in expanding our capabilities in the global lifting equipment market,” said Toshiaki Ujiie, president, CEO, at Tadano. “By integrating this business into our group, we are better equipped to serve the evolving needs of our customers and deliver long-term value.”
For coverage on the expansion of Tadano’s portfolio into the knuckle boom loader crane sector see our knuckle boom loader crane feature starting on page 24.
The information here was sourced from GlobalData’s construction intelligence platform. Cranes Today is a GlobalData owned company. Full construction reports on each of the countries covered, plus more, are available from: www.globaldata.com
