The Asian economy as a whole has been less impacted by COVID-19 than other regions, largely because of the economic powerhouse that is China.

With some exceptions, Asian countries handled COVID-19 better than most, yet the pandemic still created a huge challenge for construction. Few markets are above 90 percent of their pre- pandemic productivity. The region faced other tough challenges, many aggravated by the pandemic, such as skills shortages, notably in Japan, Singapore, Hong Kong and Shanghai. Pockets of labour shortages are common, but actions to control the pandemic have inhibited movement, slowing the rebalancing of labour markets, particularly those heavily reliant on migrant labour. In cooler markets, there is growing concern over too many contractors chasing work.

Future outlook

The underlying strength of most Asian markets should ensure recovery in the region is reasonably rapid. India’s recent COVID-19 spike presents a challenge, as does the resurgence of COVID-19 cases and slow roll-out of vaccines in many Asian nations. But the region remains one with significant promise, as China continues to expand its significant technology base, and investment in manufacturing capacity expands outwards to lower cost nations such as India and Vietnam.

Progress of the environmental agenda

Many Asian markets score relatively low on sustainability measures, reflecting tensions over net zero targets and their fairness to developing nations. Japan, South Korea and China have policy commitments to achieve net zero emissions by 2050 and 2060 respectively, but other Asian nations do not, notably India. Singapore has also set the target to work towards achieving net zero emissions as soon as viable in the second half of the century. This divide partly explains where net zero projects are more likely to occur, although global clients have a big say on sustainability. As with most of the world’s economies, much of the region’s transition to net zero carbon is contingent upon China’s progress. China consumes around 24 percent of the world’s energy and emits 29 percent of global carbon dioxide, twice that of the US. China aims to reach net zero by 2060 after peaking in 2030. This requires a huge investment to clean its energy supply. The latest five-year plan outlines eight planned clean energy bases across the nation. Encouragingly, last year China was responsible for more than 80 percent of the huge rise in installed renewable sources.

Regional construction cost performance

Top three construction challenges