Non-Residential Wooden Construction Market in Japan: Key Research Findings 2022

Non-Residential Wooden Construction Market Forecasted to Rise to 102.5% YoY to 610,000 Million Yen for FY2022

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic non-residential wooden construction market, and has found out the market size, the trends by segment, and future outlook.

Transition and Forecast of Non-Residential Wooden Construction Market (by Floor Area)
Transition and Forecast of Non-Residential Wooden Construction Market (by Floor Area)
Transition and Forecast of Non-Residential Wooden Construction Market (by Estimated Construction Expenses)
Transition and Forecast of Non-Residential Wooden Construction Market (by Estimated Construction Expenses)

Market Overview

The domestic market of non-residential wooden construction (new construction, extension/addition, and renovation) for FY2021 decreased to 3,526,000 square meters by floor area (down 8.5% from the preceding fiscal year), and the market size by estimated construction expenses fell to 595,200 million yen (down 8.7% from the previous fiscal year).  The pandemic declined the market continually for two fiscal years from FY2020 to FY2021.

A main reason for the sharp drop is the influence of the “wood shock”. * Because of the wood shock, builders (clients) not only faced the difficulty of obtaining lumber, but also the ballooning of construction expenses owing to the soaring lumber prices. On construction of private buildings, builders suspended or postponed construction projects for not being able to secure the originally expected investment yield. As a consequence, the nonresidential wooden construction market declined significantly for two consecutive years.

*Wood shock: A global surge in lumber prices caused by booming new housing starts mainly in China and the US during the pandemic, which drove up wood prices at an unprecedented rate.

Noteworthy Topics

Non-residential Wooden Construction Conforms to SDGs and Carbon Neutrality

While awareness of SDGs and carbon neutrality rises in the society, enterprises are expected to contribute to reducing environmental impact. Driven by the characteristics of wood that store/reduce CO2, the construction industry is shifting vigorously to wooden construction from traditional SRC (steel reinforced structure).

In fact, the demand for wooden and hybrid (structure combining SRC with wood) office buildings is expanding. While the nonresidential construction market shrank as a whole in FY2020 due to the pandemic, it is worth noting that office buildings, as defined as the “office (wooden)” in the MLIT’s Building Starts statistics, has shown a stable growth, attaining 100.1% year-on-year by floor area, 101.1% year-on-year by construction expenses, and 100.2% by the number of buildings. 

Future Outlook

In consideration of the fact that restrictions on activities during the COVID-19 crisis are eased and economic activities are normalizing, which led to gradual resumption of suspended construction projects as well as elimination of wood supply shortage caused by the wood shock, the nonresidential wooden construction market for FY2022 is projected to grow to 102.1% on year-on-year basis to 3,600,000 square meters by floor area, and 102.5% to 610,000 million yen by construction expenses. 

Moreover, the market is forecasted to grow to 4,400 thousand square meters by floor area (124.8% on year-on-year basis), and to 610,000 million yen by construction expenses (129.4% on year-on-year basis) by FY2025. A key driving force factor of the market will be the full-scale rise of environmental awareness expected in the future, especially the enterprises making further commitments in SDGs and ESG investing. Since the characteristic of wood, which stores /reduces CO2, harmonizes closely with the idea of SDGs and ESG investing, enterprises are likely to adopt wooden construction hereafter. Since the use of wood is effective in reducing environmental impact (compared to other building materials), the nonresidential wooden construction market is expected to expand to FY2025.  

Research Outline

1.Research Period: July to September 2022
2.Research Object: Construction businesses of non-residential wooden buildings (general constructors, house makers, construction material makers, structural material (pre-cut) makers, wooden structure material makers, laminated wood material makers, etc.)
3.Research Methogology: Face-to-face interviews by our specialized researchers (including online interviews), survey via telephone/email, and literature research. * The market size is estimated by Yano Research Institute based on the “Building Starts” statistics at MLIT, which were custom-made and collected by the National Statistics Center (NSTAC), an independent administrative institution. Note that the performance data from FY2010 to FY2021 are calculated based on the statistic deliverables which were totalized on order and provided by NSTAC in accordance with the Statistics Act. Therefore, they differ from the statistics and data created and announced by MLIT.

What is the Non-Residential Wooden Construction Market?

Non-residential wooden construction in this research indicates the construction categorized as “industrial construction (offices, shops, factories, warehouses, school buildings, hospitals/clinics, and others)” that are structurally “wooden” in MLIT’s Building Starts statistics. The market size is calculated based on floor areas of building starts and estimated construction expenses. In addition to new constructions, those for extension/addition and renovation are included.

While the category of “medium to large scale wooden construction (medium to high rise wooden building)”, which is similar to non-residential wooden construction, includes houses such as apartment houses, these are excluded from the calculation of the market size.

<Products and Services in the Market>

Non-residential wooden construction

Published Report

Contact Us

©2021 Yano Research Institute Ltd. All Rights Reserved.
The copyright and all other rights pertaining to this report belong to Yano Research Institute.
Please contact our PR team when quoting the report contents for the purpose other than media coverage.
Depending on the purpose of using our report, we may ask you to present your sentences for confirmation beforehand.