Tender prices in HK construction market to grow 4.0% in 2023

The city's post-pandemic appetite for megaprojects might raise the prices for materials and labour.

Hong Kong's construction market expects its tender prices to rise by 4% in 2023, Turner and Townsend stated in their Hong Kong Market Intelligence report.

The escalating number of large-scale construction projects in the pipeline, including infrastructure, reclamation, and housing, following China's reopening of its borders may drive the increasing demand for construction materials, such as sand and concrete, and equipment used for reclamation.

Turner and Townsend said that this part of the global post-pandemic appetite for megaprojects raised the costs for materials and labour.

READ MORE: What are the keys to overcoming challenges hammering the construction sector?

In 2022, the price of Portland cement and 50mm x 75mm sawn hardwood columns swelled by 5.1% and 5.7% to $931 per tonne and $6,939 per square metre, respectively, whilst prices of construction aggregates remained stable at $108 per tonne.

But, prices for high tensile steel bars (13% to $6,456 per tonne), sand (2.5% to $313 per tonne), and galvanised mild steel plates (1.6% to $23,241 per tonne) decreased in the same year.

However, Turner and Townsend warned construction companies to manage their projects from the outset, as any sudden upswing in demand could disrupt the supply chains and push up tender prices.

"Good project execution planning and procurement schedules for long-lead equipment and items help to prevent hindrances and enhance cost-efficiency, which is key to ensuring successful outcomes for all construction projects," Turner and Townsend added.