Optimism high in hong kong construction

Photo: Fotodilletant

Total construction workloads in Hong Kong edged up over the last three months of 2014, according to the Q4 2014 RICS Hong Kong Construction Market Monitor. All three RICS' forward looking indicators regarding workloads, employment and profit margins, suggest that respondents are optimistic about 2015.

The Monitor shows that 12 per cent more respondents from construction sector reported rising workloads in the last quarter of the year, driven by both the private housing and infrastructure sectors.

Respondents, on average, expect workloads and employment levels to rise by 2.5 per cent and 1 per cent respectively. A net balance of 67 per cent of respondents also expect profit margins to rise by around 2 per cent for the coming year.

Skill shortages are still widespread across both white and blue collar workers. The scarcity of electricians and plumbers was particularly pronounced in Q4 with all respondents having some difficulty sourcing labour in these fields.

RICS Senior Economist Andy Wu, comments: "While the construction industry is showing some signs of life, we believe the greatest challenge facing the sector this year is uncertainty. Residential construction continues to experience growth in the city. That said, we can't rule out the possibility that short-term fluctuations in residential housing prices will occur sometime this year and hence slow down output.

"Furthermore, activity in the non-residential construction sector has been losing steam, as commercial construction continues to be hit by softening demand and lower levels of consumer and business confidence. We believe growth in this sector looks unlikely to pick up until the arrival of a more sustainable economic recovery."