Global Economic Impact
The slowdown in global economic growth also will undercut growth in demand for new buildings throughout the region. In China, where half the world’s construction activity takes place, signs of a slowdown are becoming increasingly apparent. Vacancy rates for commercial property are rising as large amounts of new supply come on the market.
China ranks second in Asia and third in the world; spending there totaled about $300billion in 2009. The construction industries of India and Australia are each worth less than $100 billion in annual revenues. With China at the forefront, the construction industry in Asia (excluding Japan) is growing faster than that of any other region. China, India, South Korea, and Vietnam will rank at the top worldwide in terms of construction spending growth over the 2012–17 periods, according to Global Insight estimates. Stock Exchange plunged almost 10% in one day, investor interest in shares of construction companies is strong, thanks to the building boom in China and the government’s plan to finance huge infrastructure projects in the coming years. China Communications Construction Group Ltd., the largest harbor construction company in China and the world’s largest maker of container cranes, led the way. The sale was viewed as an unqualified and success, with strong initial demand from investors and sustained price gains since the listing, and is encouraging other companies to go public.
China’s construction industry is huge. It accounts for about 6.6% of the country’s gross domestic product (GDP) and is the fourth-largest industry in the country. As of 2009 (latest available), there were some 38 million people working at about 66,000 architecture, construction, and engineering companies in China, according to the National Bureau of Statistics. All land in China is property of the state, and thus all land-use projects must obtain government approval.