No.2667
04/12/2021
Eight Major Construction Market in Japan: Key Research Findings 2020

Domestic Eight Major Construction Market Size Decreased by 1.9% on a YoY Basis to 2,209,800 Million Yen

Yano Research Institute (the President, Takashi Mizukoshi) carried out a survey on the domestic eight major construction markets and found out the market size, trends by each category, and future perspectives.


Transition and Forecast of Total Market Size of Eight Major Constructions (Based on Estimated Construction Cost)
Transition and Forecast of Total Market Size of Eight Major Constructions (Based on Estimated Construction Cost)

Market Overview

The total eight major construction market (total market size of eight categories: Housing/Residence, Commercial Facility, Office Building, Hotel, Factory/Plant, Distribution Warehouse, School, and Hospital) for FY2019 based on the estimated construction cost fell to 2,209,800 million yen, 98.1% of the previous fiscal year.

In FY2019, while the construction demand for Tokyo Olympic and Paralympic Games somewhat subdued, the office building category thrived because of increased demand for large-scale urban redevelopment projects, and the category of distribution warehouses also expanded, encouraged by increasing demand for ecommerce. However, all the other categories ended up decreasing from the previous fiscal year. This scaled down the entire market of eight major constructions to 98.1% on a year-to-year basis. The reduction, however, was slight, because of soaring costs for labor and building materials as well as equipment, stemming from special construction demand for Tokyo Olympic and Paralympic Games, which raised the unit price per construction.

In addition, the influence of COVID-19 pandemic to the total market of eight major constructions was relatively small in FY2019, though the housing category somewhat affected, causing delivery delay of housing equipment that put off handover of houses.

Noteworthy Topics

Influence of COVID-19 Pandemic to Office Buildings

The COVID-19 pandemic has brought about diversification of workstyles, which spread teleworking. This resulted many companies to reconsider the necessity of offices themselves. Some major companies have already relocated their headquarters, have sold their office buildings, or have diminished the office floors. Such cases are likely to increase furthermore hereafter. In such circumstances, the office-building construction projects currently underway may be forced to change the specification or to postpone, or consequently to be suspended. The category of office buildings seems to be facing the transition period, as the conception and required functions of offices are changing amidst workstyle diversification.

Future Outlook

The total eight major construction market (total market size of eight categories: Housing/Residence, Commercial Facility, Office Building, Hotel, Factory/Plant, Distribution Warehouse, School, and Hospital) based on the estimated construction cost is expected to be 1,890,000 million yen by FY2023, 85.5% of the size of FY2019.

While the market size significantly scaled down in FY2020 due to COVID-19 infections, increasing demand is expected in distribution warehouses because of expanding ecommerce, and in hotels, as hotel constructions in progression for the Osaka-Kansai Japan Expo in 2025. However, the categories of housing/residence, commercial facility, and school are likely to be on the decline hereafter, as no specific growth factor detected.

Research Outline

1.Research Period: October 2020 to January 2021
2.Research Object: Major eight categories within the construction industry: Housing/Residence, Commercial Facility, Office Building, Hotel, Factory/Plant, Distribution Warehouse, School, and Hospital
3.Research Methogology: Collection of documents and publicized data by the expert researchers, analysis based on bespoke data aggregation by National Statistics Center on the data in “Statistics of Construction Starts” by Ministry of Land, Infrastructure and Transport

The Total Market of Eight Major Constructions

The total market of eight major constructions in this research refers to the indispensable eight categories within the construction industry which are: 1) Housing/Residence, 2) Commercial Facility, 3) Office Building, 4) Hotel, 5) Factory/Plant, 6) Distribution Warehouse, 7) School, and 8) Hospital. The definitions of each category have been re-categorized by Yano Research Institute in this research, based on the category by construction application in the “Statistics of Construction Starts” at Ministry of Land, Infrastructure and Transport. All the categories include the new constructions as well as extension and reconstruction of buildings. The market size is based on the estimated construction cost. The actual values from FY2017 to FY2019 are quoted from bespoke data aggregation by National Statistics Center on the data in “Statistics of Construction Starts” by Ministry of Land, Infrastructure and Transport. Other values are estimation by Yano Research Institute.

The details of each category (market) are as follows:
1) Housing/Residence refers to total values of the buildings that are solely for dwelling, and dwelling and industrial use combined buildings (the buildings for dwelling but have no individual kitchens equipped.) 2) Commercial Facility refers to a store building or a complex used for wholesaling, retailing, food services, and other direct transactions of commodities. 3) Office Building refers to a building used for offices, at which desk works and the like are carried out. 4) Hotel refers to a building for accommodation. 5) Factory/Plant refers to an industrial building (or group of buildings) where a company manufactures or assembles products (in very large quantities), or a work place for product packaging, packing, product inspection. A computer operation room and a pump house are included. 6) School refers to school buildings, including a gymnasium, etc. 8) Hospital refers to a building for hospital, clinic, hospital ward, etc.

<Products and Services in the Market>

Housing/Residence, Commercial Facility, Office Building, Hotel, Factory/Plant, Distribution Warehouse, School, and Hospital

Published Report

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