Hong Kong construction industry to contract by 1-2% in 2024: JLL

Fit-out cost increases are expected to remain stable at 2% in the second half of 2024, FY 2025, and FY 2026.

Hong Kong’s construction industry is expected to contract by 1-2% in real terms in 2024 due to tight financial conditions, high inflation, and elevated interest rates.

In a report, JLL said the fit-out sector remains resilient despite these challenges, with firms shifting from consolidation to expansion.

Meanwhile, it projects fit-out cost increases to remain stable at 2% in the second half of 2024, FY 2025, and FY 2026.

The slowing economic growth in China presents a significant risk to Hong Kong’s fit-out market, as it could lead to increased costs for materials, labour, and energy.

Additionally, landlords are responding to market conditions by offering attractive rent-free periods for lease renewals and partial subsidies for fit-out costs.

Labour shortages and rising material costs remain persistent challenges in Hong Kong’s fit-out industry, JLL noted.