Hong Kong - Country Commercial Guide
Hong Kong and Macau - Construction Industry

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-21

Overview  

The table shows trade data for construction materials and equipment in Hong Kong.  

  

2018 

2019 

2020 

2021 (estimated) 

Total Exports  

75

69

70

71

Total Imports  

73

68

68

69

Imports from the U.S.  

2.4

2

2

2

Exchange Rate: 1 USD  

7.8 

7.8 

7.8 

7.8 

Units: USD billion  

Data Sources: Hong Kong Census & Statistics Department 

(Construction materials and equipment refer to SITC codes from 62111 to 81217)  

As one of the most densely populated cities in the world, Hong Kong’s construction industry is characterized by compact high-rise residential buildings and office towers.  Hong Kong developers are experts in slope and high-density design, as well as designing within tight space constraints.  The techniques of reclamation, design-and-build methods with innovative application of building materials have also made Hong Kong a regional leader.

The U.S. Commercial Service in Hong Kong has met with several top developers in Hong Kong. Each of these contacts has expressed willingness to have future discussions about partnerships with U.S.-based architecture, construction, and engineering firms.  In addition, U.S.-made construction equipment and technology has potential in Hong Kong, particularly higher value-added products.  Interested U.S. firms should work with a local distributing company to enter the market as most construction companies will source supplies through local distributors.  For some major projects, however, Hong Kong contractors may seek suppliers directly from manufacturers for specific types of products and equipment.

Leading construction companies and developers are interested in engaging with foreign companies that understand the most cutting-edge construction and design practices. Currently, European construction and design firms are much more dominant than U.S. firms.  The U.S. Commercial Service believes that there is potential for the U.S. to have more market share.

Due to the disruptions caused by the Covid-19 pandemic and uncertainty from the U.S.-China trade war, Hong Kong experienced a record plunge in economic performance in 2020, causing infrastructure and construction projects to be largely halted. According to the Hong Kong Census and Statistics Department, the city’s construction industry continued to decline in the third quarter of 2020, contracting by 10.6 percent year on year in real value-add terms, marking the eighth consecutive quarterly decline since the fourth quarter of 2018. The total gross value of construction works performed by main contractors in 2020 was recorded at US$16.5 billion, down from US$17 billion in 2019.

To help revive the economy, the Hong Kong government increased spending on US$65 billion of public works such as housing, metro/railroads, highway construction etc. over the next 5 years, and another US$65 billion on two 10-year (2016-2035) hospital development programs to provide about 90 operating theatres and other hospital supplies to meet projected service demand.  In addition, to tackle the city’s chronic land shortage and housing problem, the government has approved Lantau Tomorrow Vision.  This project will become the largest reclamation project in the city, with an estimated at US$80 billion to be spent on housing, transportation links and other infrastructure. U.S. construction design and engineering firms can partner with local developers and construction firms to bid for various projects in this Lantau Tomorrow Vision. Please note that either the foreign construction professionals such as architects, engineers and surveyors or local partners must register with the Development Bureau to be on the approved list for works.   Aside from government spending as a driver of construction in Hong Kong, Mainland Chinese investors are also active in the market.  Most investments from Mainland China are in commercial and residential property, financing and banking, import/export trade, wholesale and retail.

To enhance efficiency and minimize material waste in the construction sector, the government has strongly encouraged the industry to engage more in automation technology, prefabricated parts, and innovative construction methods such as BIM and MiC to increase productivity.  In 2018, the government mandated the use of BIM for all government projects over US$3.9 million. 

Leading Sub-sectors: 

  • green building materials and equipment 
  • low/zero carbon design and technologies  
  • building efficiency optimization systems and equipment 
  • building automation and management systems  

carbon assessment tools  

building information modeling software and modular integrated construction solutions 

Opportunities 

Green Building and Design:  In response to the Paris Agreement on climate change, the Hong Kong government-initiated policies aimed at achieving carbon neutrality y 2050.  These policies include investing in the development of green buildings as a top priority.  There are over 42,000 private buildings and more than 8,000 government buildings in Hong Kong.  These buildings account for 90 percent of the total city’s electricity consumption and generate 60 percent of the city’s carbon emissions.  To save energy and reduce emissions, the government has introduced BEAM Plus, a set of strict green certification standards to drive strong sustainable building performance and it has saved over 700,000 MWh of electricity each year.

Buildings that achieve certain energy savings with BEAM Plus or other internationally recognized standards such as LEED, BREEAM, and EDGE will be eligible for tax deductions.  The government also allows private buildings to increase floor areas when green design elements are incorporated into buildings.  With these incentives, property developers are increasingly willing to invest in green buildings.  Prominent buildings with top green rating include K11 (New World Development), Taikoo Place (Swire Properties) and the International Commerce Centre (MTR and Sun Hung Kai Properties).  These developers have established strong partnerships with foreign green design and engineering firms such as AECOM, Kohn Pedersen Fox, Arup, James Corner Field Operations, etc. 

Current Market Assessment 

According to ResearchAndMarket.com, the construction industry is expected to grow by 1.5 percent in real terms in 2021 as ongoing vaccinations have given a higher expectation to contain Covid-19 epidemic in Hong Kong, in addition to increased investment on infrastructure projects by the government.  The easing of social distancing measures and other fiscal stimulus measures announced in early 2021 have further improved domestic consumption and private investment in the city.

Many foreign construction companies are attracted to the Hong Kong market as the city also serves as a springboard to gain access to the vast Chinese mainland market and the greater Asia-Pacific region. U.S. exporters of design and build technology and equipment enjoy a good reputation of high quality, advanced and innovative products.  They are well-known for providing strong project management skills and sophisticated engineering services.  There are some successful U.S. construction and engineering firms that participate in major projects in Hong Kong, namely, AECOM (involved in over 20 major infrastructure projects), Bechtel, Cummins, Emerson, Honeywell, Jacobs Engineering, etc.

Resources 

Major Trade shows: 

The Construction Innovation Expo, Dec 13-16, 2022

The event provides an excellent sharing and matching platform with the vision to promote innovative and advanced construction design methods, devices, processes, materials, systems and applications on 4 key themes - Offsite Construction, Mechanized Construction, Digital Construction, and Advanced Materials & Technologies.

Build4Asia, May 4-6, 2022 

Build4Asia is a trade show for the Building, Electrical Engineering and Security Industries in Hong Kong which covers every facet of the construction industry from building materials and automation, smart city technologies to total surveillance system.

Associations and government agencies:  
Hong Kong Construction Association 

Construction Industry Council 

The Hong Kong Institute of Architects 

The Hong Kong Green Building Council 

Development Bureau 

 

For more information about this industry sector, please contact:

U.S. Commercial Service, Hong Kong

Kitty Leung, Commercial Specialist

Email: kitty.leung@trade.gov