The construction sector of Hong Kong had been expanding significantly before 2019. Between 2008 and 2018, the industry expanded by about 50%, and more than 1500 new construction jobs in Hong Kong were created in the construction sector alone. As such, the city has been attractive to foreign investors looking for construction work abroad. Unfortunately, the construction sector declined in 2019 and 2020, owing to a number of factors. However, this trend is set to turn around in 2021 following a major announcement from the leaders of Hong Kong.
In the recent budget reading, Chief Executive Carrie Lam Cheng Yuet-ngor announced that the government will invest HK$500 billion in public works over the next five years in an attempt to pull Hong Kong out of the recession. This plan will see big projects like housing, rails, and roads being divided up so that small contractors can become eligible for tenders. Therefore, foreign investors looking for construction work abroad can take advantage of these opportunities. The construction sector is one of the industries that is struggling the most from the recession in Hong Kong, but with such a large amount of money set aside for the industry, we expect to see a major expansion of construction jobs in Hong Kong.
According to Chief Executive Carrie Lam Cheng Yuet-Ngor, the investment in the construction sector is an example of the overall approach to revive the economy in Hong Kong. The strategy applied in this sector will also be used in other sectors once the government determines how much such investments improve the economy.
The Proposed Solution
The challenges in the sector primarily originate from the Covid-19 pandemic and the recent aggression with mainland China. These are the reason why the HK$500 billion construction jobs investment was announced in the budget. In the former fiscal year, the legislative council in Hong Kong approved HK$170 billion in public works. The money was meant to be used to boost construction projects in Hong Kong. Of all these, half of the promised tenders have already been awarded while there is still 48 per cent of the projects that are yet to be given. The remaining portion is expected to be put up imminently.
According to the leaders of the city, tenders for new projects are to be launched simultaneously. The launch will also include the tenders seeking approval from lawmakers who would guarantee that the contracts would be granted.
The president of the Hong Kong Construction Association showed full support for the measures. According to Allan Chang Sau-kit (the president of the Construction Association), the introduction of new tenders and projects will solve the issue of there being too few projects to sustain employment for the construction workers for months. However, the solution would have to wait a bit because it would take a couple of months between the launch and the awarding of contracts.
The HK$500 billion is aimed at keeping the struggling construction sector afloat. Resolving the issues in the construction sector of Hong Kong will also influence other industries. Factories will start running better, and the transport industry will also get influenced positively.
It is important to note that Hong Kong is one of the most densely populated places in the world, which is why the construction sector had been growing significantly before 2019. At the moment, the city has a population of about 6,000 people per square kilometre. As such, real estate is both a social and economic concern, and it has the potential to yield massive returns in the country. In fact, the government of Hong Kong sees construction as the industry that will earn it the smart city status. That is why the city has implemented programs to improve the construction sector over the years.
One of these programs is the Long Term Housing Strategy, which was launched in 2014. This program aimed at lowering the cost of housing in Hong Kong since the prices had become too much for the ordinary resident of the city. Another program that is being implemented by the government is the Climate Action Plan 2020, which is a cross-sectoral policy. It is set to make Hong Kong an excellent place to live and work, and this will eventually increase the profitability of the construction industry.
The city is also implementing expansions in the hospital constructions, which will also offer opportunities to investors in the construction sector. Another excellent opportunity is in the construction of facilities for universities. Other programs that will increase opportunities in the construction industry include the Railway Development Strategy and the Hospital Development Program. The government intends to give lots of opportunities to smaller investors, which is why they plan on implementing various anti-landslide projects. Also, they are planning to invest huge sums of money in the maintenance of facilities around the city.
With these projects underway and the massive boost in public expenditure, the employment rate is set to go up significantly in 2021. Workers who have been out of a job for months can celebrate with this announcement.
If you are interested in working in Hong Kong in 2021, this could be the best time to think about making the leap. Contact us to discuss the opportunities we are recruiting for right now.
About the Author
Construction Recruitment Director, Hong Kong
I am responsible for the recruitment business in Hong Kong, Asia, and the Middle East. I was a civil engineer and project manager for 15 years before becoming a construction industry recruitment consultant in 2004. I am based in the Hong Kong office and specialise in placing professionals in engineering, project management, planning, HSEQ and risk.
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