This is a best prospect industry sector for this country. Includes a market overview and trade data.
Overview
|
|
2019 |
2020 |
2021 |
2022 (Jan – Mar) |
|---|---|---|---|---|
|
Total Exports |
184,000 |
136,000 |
173,000 |
38,000 |
|
Total Imports |
181,000 |
129,000 |
160,000 |
34,000 |
|
Imports from the U.S. |
98,000 |
46,000 |
52,000 |
1,000 |
|
Exchange Rate: 1 USD |
7.8 |
7.8 |
7.8 |
7.8 |
Units: USD million
Data Sources: Hong Kong Census & Statistics Department
Current Market Assessment
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. U.S. firms are also well-known for providing strong project management skills and sophisticated engineering services. Some successful U.S. construction and engineering firms that have participated in major projects in Hong Kong are, AECOM (involved in over 20 major infrastructure projects), Bechtel, Cummins, Emerson, Honeywell, Jacobs Engineering, etc.
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 with tight space constraints. The techniques of reclamation and design-and-build methods with innovative application of building materials have also made Hong Kong a regional leader in this field.
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 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.
Several top developers in Hong Kong that have expressed their openness for partnerships with U.S.-based architecture, construction, and engineering firms. In addition, U.S.-made construction equipment and technologies have potential in Hong Kong, particularly for higher value-added products. Interested U.S. firms should work with a local distribution company to enter the market as most construction companies will source supplies through local distributors. For some major projects that require specific types of products and equipment, however, Hong Kong contractors may seek out manufacturers and suppliers directly. The total gross value of construction works performed by main contractors in 2021 was recorded at US$16 billion, down from US$16.3 billion in 2020.
Over the next 5 years, the Hong Kong Government plans to spend US$65 billion on several 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 announced plans for the Northern Metropolis Development Strategy (NMDS), alongside the Lantau Tomorrow Vision plan. Both are mega-project initiatives designed to increase land supply and to drive innovation and technology development. The government will spend at least US$12.8 billion on the first batch of infrastructure works under NMDS, covering 4 new towns and 6 new development areas. While the Lantau Tomorrow Vision includes the creation of a third core business district with an estimated 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 associated with these two initiatives. 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, and wholesale and retail trade.
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 building information modeling (BIM) and modular integrated construction (MiC) to increase productivity. The HKG mandates 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 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 sustainable building performance and energy efficiency.
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 area 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.
Resources
Major Trade shows:
Build4Asia, Nov 16-18, 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.
Construction Innovation Expo, Dec 12-16, 2022
The expo 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 four key themes - Offsite Construction, Mechanized Construction, Digital Construction, and Advanced Materials & Technologies.
Associations and government agencies:
Hong Kong Construction Association
The Hong Kong Institute of Architects
The Hong Kong Green Building Council
For more information about this industry sector, please contact:
U.S. Commercial Service, Hong Kong
Email: Office.Hongkong@trade.gov