The Construction Economic Research Institute and the Economic Research Institute released the latest construction investment outlook on the 2nd. Total investment (nominal value) in FY2023 is projected to increase by 2.5% from the previous year to 71.77 trillion yen, and total investment in FY2024 is projected to increase by 1.2% from the previous year to 72.66 trillion yen.
Socio-economic activities will return to normal, and private sector willingness to make capital investment in the non-housing sector will increase. He expects construction material prices to remain high, but said he expects consumer sentiment to buy housing to recover in fiscal 2024, when wages and other factors will have an impact.
The private non-housing sector is expected to reach 22.69 trillion yen in fiscal 2023 (up 2.8% from the previous year) and 23.04 trillion yen in fiscal 2024 (up 1.5%). Companies are highly motivated to invest in equipment. In particular, demand for new construction of factories centering on warehouses, distribution facilities, and semiconductors was strong. Offices, lodging facilities, and civil engineering investments will continue to grow steadily. On the other hand, store sales are declining due to soaring prices, and floor space for construction starts is expected to decrease.
Government investment in fiscal 2023 is expected to reach 23.64 trillion yen (up 3.4%). The budgets for both the national and local governments are at the same level as in fiscal 2010, but in fiscal 2023, transaction volume has increased compared to the same month of the previous year. In fiscal 2012, it is estimated to be 23.77 trillion yen (up 0.5%).
The private housing sector is expected to reach 16.81 trillion yen (down 0.1%) in fiscal 2023. We factored in negative factors such as persistently high construction costs and concerns over rising mortgage interest rates. 16.95 trillion yen in FY2012 (up 0.8%). Although construction costs are expected to remain high, a recovery in demand for housing can be expected due to rising consumer wages and other factors.
