China's construction spending continues to riseCLEVELAND, OH —

Construction spending in China is expected to rise 9.4% per year through 2015, moderating from the rapid pace of the 2005-2010 period, according to The Freedonia Group, an industrial research company.

The gains will be bolstered by a growing domestic economy, ongoing urbanization and industrialization, rebounding foreign investment funding, continuing efforts to expand and upgrade physical infrastructure, and rising income levels, affecting the residential, commercial and non-building structure segments.

According to Construction Outlook in China, a new study from the Beijing office of The Freedonia Group Inc.,  spending on residential buildings is projected to grow at an annual pace of 9.7% through 2015. Gains will be primarily supported by rising personal income levels and ongoing population migration from rural to urban areas. The government's efforts to improve living conditions for low-income earners — including the construction of affordable and low-rent houses in urban areas and subsidies for alterations of dilapidated farmhouses in rural areas — will also bolster residential building construction spending.

Nonresidential building construction expenditures are forecast to rise 8.3% per year through 2015. According to Freedonia, growth will be driven by strong increases in construction spending on commercial and office applications, spurred by a growing services sector as well as rising personal income levels. However, the study shows, a moderation in growth in the manufacturing sector will restrain gains, and nonresidential building construction spending will increase more slowly than both the nonbuilding and residential building segments.

Posted by Karen Koenig

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