The Chinese construction industry has suffered a sharp downturn amid the outbreak of the coronavirus, Covid-19, as is evident in newly released data showing the recent decline in real estate investment. According to the latest data issued by China’s National Bureau of Statistics (NBS), the total investment in real estate development declined by 16.3% year on year in the first two months of 2020. This compares to the growth of 9.9% recorded in the whole of 2019.
Of the total, the real estate investment in residential buildings declined by 16% year-on-year in the first two months of 2020, dropping to CNY731.8bn ($103.2bn), while investment in commercial business buildings and office buildings declined by 25.6% and 17.8% respectively, falling to CNY97.9bn ($13.8bn) and CNY55bn ($7.8bn) respectively.
In terms of region-wise investment, the largest decline in real estate investment was recorded in the Central region, where the total investment in real estate development declined by 23% year on year in the first two months of 2020. This reflects the fact that Hubei province, which was at the epicenter of the outbreak, lies in this region. Nevertheless, there were significant declines in other regions also, with the total real estate investment decline in the Western region dropping by 17.6%, in the Northeastern region by 13.8%, and in the Eastern region by 13.1%.
According to the NBS, the total area of newly started construction reached 103.7 million m2 in the first two months of 2020, a decrease of 44.9% compared to the same period in 2019. The total area of newly started residential construction declined by 44.4% year on year, reaching 75.6 million square metres that period, whereas the total area of newly started commercial business building construction and office buildings construction declined by 50.7% and 58% respectively during the same period.
Reflecting the disruption to construction works, the area of construction completed declined by 22.9%, to 96.4 million square metres in January–February 2020. The total area of completed residential buildings declined by 24.3% in the first two months of 2020, whereas that of commercial buildings and office buildings had declined by 29.8% and 8.1% respectively during the same period.
Reflecting the recent decline in construction, the total area sold of commercial buildings declined by 39.9% in the first two months of 2020, compared to the same period in 2019, while the total value of commercial buildings sold declined by 35.9% year on year during the same period, according to the NBS.