2022 Construction Industry Development Trend Analysis: Opportunities and Challenges

The changing trend of the construction industry is closely related to the macroeconomic trend. In recent years, with the decline in economic growth, the overall growth rate of the construction industry has also slowed down. The output value profit margin (total profit) of the construction industry has also slowed down. Ratio to total output value) has shown an overall downward trend since reaching its highest value of 3.63% in 2014.

Under the new situation, what opportunities and challenges does the construction industry, as a pillar industry of the national economy, face?

Opportunities for the development of the domestic construction industry:

1. New urbanization still has a long dividend period

my country’s urbanization process has entered the middle and late stages. In 2021, my country’s The urbanization rate reached 64.72%. The national "14th Five-Year Plan" and the 2035 Vision Outline propose that the urbanization rate of the permanent population will increase to 65% during the "14th Five-Year Plan" period, to 75% in 2035, and to 80% in 2050.

2. Prefabricated buildings have become mainstream

In recent years, the state has continued to increase its development policies for the prefabricated construction industry, and industrial support has gradually become more targeted and targeted. It has been clarified that new buildings nationwide in 2025 The proportion of prefabricated buildings in China will reach 30%. Supporting policies in various regions have been followed up in a timely manner. Policies in major regions have been strongly promoted, and the construction area has grown rapidly.

3. The new channel for green and energy-saving buildings continues to expand

The country has clarified 9 key tasks during the "14th Five-Year Plan" period: improving the quality of green building development, improving the energy-saving level of new buildings, strengthening Energy-saving and green renovation of existing buildings, promoting the application of renewable energy, implementing building electrification projects, promoting new green construction methods, promoting the promotion and application of green building materials, promoting regional building energy synergy, and promoting green city construction.

4. The general engineering contracting model will become the main development model of the construction industry in the future

The general engineering contracting model occupies a large share in the international engineering market, and is also used by the government in the current domestic engineering market. A model that the management departments and the current "Construction Law of the People's Republic of China" strive to promote is increasingly used in construction production in our country.

5. The business model extends to the integrated development of the entire industry chain of "investment, construction and operation"

In order to adapt to the development needs of the industry, large-scale construction companies are vigorously expanding planning and design, investment and financing, With high value-added business capabilities such as full-process consulting and industry introduction, we will accelerate the pace of high-end chain replenishment and chain strengthening in the industrial chain, strengthen collaborative integration among industrial chains, and comprehensively enhance the competitive advantage of the entire industry chain and integrated development.

6. The PPP market is still an important direction for the transformation of construction industry enterprises

The PPP market model (note: that is, the cooperation between the government and social capital, is one of the public infrastructure Innovation in various project operation models is also the general trend. Infrastructure RETIS and hybrid ABO bring new opportunities to the PPP market. Construction companies continue to promote scale development. PPP projects are still an opportunity to hold high-quality operating assets and are an opportunity for asset-operated companies. important means of transformation.

7. The new infrastructure market has large development space

In the future, the construction industry will accelerate its transformation to informatization, digitalization, and intelligence, including smart cities, smart transportation, smart energy, and smart buildings. As a new development direction, the nesting and integrated development of new infrastructure and traditional infrastructure has become inevitable, which will profoundly change the implementation method, production organization and management model of the construction industry.

8. The construction market system and operating mechanism will be more complete

By 2025, the revision of the Construction Law will be accelerated and the legal and regulatory system will be more complete. The enterprise qualification management system has been further improved, the management of individual professional qualifications has been further strengthened, the project guarantee and credit management system has been continuously improved, and a market-oriented mechanism for project cost has been initially formed. The organizational model of engineering construction continues to be optimized, and general engineering contracting and full-process engineering consulting are widely promoted.

Challenges faced by the domestic construction industry:

1. Rising factor costs have become a constraint on the development of the construction industry

The cost of high-quality supply chain resources continues to rise, and controlling high-quality Supply chain resources have become an inevitable trend. It has become an inevitable trend to develop and expand the team of industrial workers and extend to the supply chain through mixed-ownership reform, mergers, acquisitions, etc. Labor resources continue to decrease, and collaborative team resources have become a bottleneck for corporate expansion.

2. The high indebtedness and high leverage of various owners have led to rising operating risks of construction companies

All types of owners are short of funds, and their solvency has become the biggest risk. Some of these local governments have high debt risks and require enterprises to make prudent choices. According to data from the Ministry of Finance, governments in Jiangsu, Hunan, Guizhou, Yunnan and other places are under greater financial pressure. In terms of developers, major developers have stepped up deleveraging and risk reduction, but the currently widely used large-node payment method has put greater financial pressure on construction companies.

3. The reform of state-owned enterprises will accelerate the integration and reorganization of construction companies

The overall goals of the "Three-Year Action for State-owned Enterprise Reform" and "Benchmarking International Classes" are to stimulate corporate vitality and optimize governance. model, to realize the transformation from managing enterprises to managing assets, state-owned enterprises will be further pushed into the market, and enterprises with low competitiveness will be optimized and reorganized in the market.

4. The market operating risks of construction companies are still hovering at high levels

For a long time, the asset-liability ratio of construction companies has been on the high side due to their industry characteristics. In the horizontal comparison of various industries, Second only to the financial industry and real estate industry. As of the end of 2021, the asset-liability ratio of local construction state-owned enterprises is still hovering at a high level of 80%, and some even exceed 90%.

5. The application of new technologies in the construction industry will accelerate the professional transformation of industrial workers

With the application of BIM technology, smart buildings, smart construction sites, drones and other technologies in construction projects, Gradual application requires construction companies to accelerate the professionalization of industrial workers, increase training in the use of new materials, new equipment, and new technologies, have a group of highly skilled construction industry workers, and improve production efficiency and engineering construction quality. However, there is a shortage of highly skilled talents in construction companies, the aging of industrial workers is increasing, and their education and skills are low, which restricts the transformation of the construction industry from large to strong.