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Hong Kong Construction

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 space constraints.The techniques of reclamation, design-and-build methods with innovative application of building materials have made Hong Kong a regional leader.  

The construction market in Hong Kong is dominated by a small number of large local contractors, a large number of overseas contractors, and a high level of sub-contracting, with substantial companies being both developers and contractors. According to the Hong Kong Census and Statistics Department, the gross value of construction works performed by main contractors in 2019 was recorded at US$17 billion, down from US$18.6 billion in 2018. Residential construction was the largest market in the industry during the period of 2015-2019, accounting for 43% of its total value in 2019 at US$7.3 billion.

Foreign contractors should partner with a local construction company to bid for public residential and infrastructure projects in Hong Kong.  Either the foreign contractor or the local partner needs to register with the Development Bureau as the Approved Contractor for Public Works and/or Approved Suppliers of Materials in order to carry out public projects. 

The Hong Kong Government has made great efforts to promote economic growth through infrastructure development. To enhance efficiency and minimize material wastage in the construction sector, the government has been promoting the use of modern technologies such as Building Information Modeling (BIM) and Design for Manufacture and Assembly (DfMA).  In addition, a U.S. $130 million Construction Innovation and Technology Fund has been set up by the government to encourage the adoption of innovative technology, automation and digitalization. U.S. companies with quality building materials and sophisticated technology can grab this opportunity to introduce their products and services to the industry in Hong Kong.

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 Mainland market and other parts of the Asia-Pacific. In particular, there are no formal restrictions on entry to the contracting businesses in Hong Kong.  Foreign and local contractors are welcome to tender public sector projects.  There are a number of successful U.S. construction and engineering firms that participate in major projects in Hong Kong, namely, AECOM (involved in over 20 major infrastructure projects), Black & Veatch, Cummins, Emerson, Honeywell.

Due to the anti-government protests, the outbreak of Covid-19 and the U.S.-China trade tensions, the construction industry has been severely affected. The city’s gross value of construction works decreased 9.4% in the first quarter of 2020 to US$3.7 billion.  The unemployment rate in the construction industry sharply increased to 11.2% in the second quarter of 2020, compared to 5% in the same quarter last year, rising to its highest level since mid-2009. According to GlobalData, the construction industry is expected to contract by 9.2% in 2020. However, a recovery phase may start in 2021 as the government will stimulate public and private sector investment in construction projects by investing US$127.6 billion in infrastructure by 2028-2029. Moreover, up to July this year, the Legislative Council approved US$92 billion Capital Work Reserve Fund for future public projects, showing signs of recovery and more job opportunity to the industry.

For more information please contact: U.S. Commercial Service, Hong Kong, Email: Office.Hongkong@trade.gov
Phone: +852 2521 1467