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Earlier this month, it emerged that national real estate development investment in the country between January and July this year dropped 10.2% to 6,087 billion yuan (US$850 billion).

China’s property crisis was sparked by the 2021 default of Evergrande Group and since then has proven to be a drag on the country’s economy as a whole, with inevitable consequences for the construction industry.

So in today’s Construction Briefing, we delve further into the figures from China’s to gauge the size and scale of the construction sector in the country, and how it compares to the past.

To achieve this, we’ve produced six separate charts that look at different areas ranging from construction activity levels, to the number of construction companies and employees in the country, to the combined power in kW of the country’s construction machinery.

All the charts are based on data published by the National Bureau of Statistics of China. Even though the Bureau has itself acknowledged a decline in real estate development this year, it’s worth noting that there are question marks around the reliability of some of the figures it produces.

An by the Financial Times noted that forecasters are skeptical, at last as far as China’s official GDP numbers are concerned. “While China puts significant resources into its National Bureau of Statistics, trust in its output has been dented by deteriorating transparency,” it said.

Nonetheless, economists still use the figures, if only as a reference point, and the data relating to the construction sector give some indication of the state of play, even if they may need to be taken with a pinch of salt:

Starting with construction industry activity, the China Construction Business Activity Index shows declines in May, June and July this year. However, the score remains above 50.0, where 50.0 indicates no change, which still puts activity firmly in positive territory. July 2024’s score of 51.2 is also exactly the same as the score registered in July 2023.

July 2024’s Construction Business Activity Index did point to declining new orders, however. The new order index for the construction industry came in at 40.1, a decrease of four points from the previous month, according to the National Bureau of Statistics.

So far, there is little indication of a decline in new orders when it comes to the quarterly value of new contracts signed by construction companies in China (see above). Figures running from the first quarter of 2020 up until Q2 2024 show annual fluctuations in new contract values, according to the seasons, but also paint a picture year-on-year growth, even during the period that was affected by strict covid lockdowns.

Meanwhile, official figures put the number of construction businesses in China at nearly 158,000. The number of enterprises shows steady growth from 2016 onwards, although it was largely flat between 2014 and 2015, a period during which the country’s construction sector suffered a slump amid the slowest economic growth in more than two decades.

There was more variation in the annual figures for the number of people employed in the industry, which only run up to 2022. In that year, the industry employed a total of more than 4.6 million people, up from 3.7 million in 2014.

The gross output value of China’s construction industry also shows a consistent upward trend since 2014, increasing 78.8% in less than a decade between 2014 and 2023. In 2023, Chinese construction’s total gross output value stood at CNY 31.6 trillion (US$4.4 trillion), according to the figures.

Data for the number of construction machinery units in China is only available until 2022.

Interestingly, it has declined from 10.9 million units in 2018 - an eight-year high - to 5.7 million in 2022, even in the face of a reported rise in construction output over the period. The total power of machinery and equipment owned by construction enterprises was also at its lowest level since 2007 in 2022, according to the figures, at 169.3 million kW, down from a high in 2014 of 296 million kW in 2014.