Construction upturn

Japan: Japan's Research Institute of Construction and Economy predicts the country's construction investment will increase +0,7% in the fiscal year to March 31, 2005, to a total of JPY 52,71 trillion (US$ 499 billion)

The projected rise is attributed to a strong private-sector non-residential construction sector, as well as increases in natural-disaster-related public spending. However, the Institute cautions that the increase in public spending resulting from natural disasters will be temporary. Public-sector construction investment is forecast to fall -0.05% to JPY 20.42 trillion (US$ 106 billion), much less than the drop of -11.1% in fiscal 2004.

Private-sector non-residential construction investment is expected to grow on recovering corporate earnings.

The institute, which is affiliated with the Ministry of Land, Infrastructure and Transport, predicts that construction starts (in terms of floor space) will increase +0.4% for offices, +4.1% for shops and +7.1% for factories. Overall non-residential investment is expected to grow +3.8%, following the +5.8% rise seen last year.

Private-sector housing investment is expected to slide -0.8% on lower housing starts, after a +1.6% increase in fiscal 2004.