international
construction
january-february 2015
ECONOMICOUTLOOK
18
Slowingmarket
materialised to the extent needed to justify robust
private investment.
While interest rates have been cut, profit
conditions have only improved moderately.
Retained earnings are a main source of Chinese
investment financing, and while profits were up
+12.2% in2013 and+10.0% in2014, these pale
in comparison to the +30% to +40% growth of
the 2000s.
Also, China’s WTO accession led to Foreign
access to the industries,while ensuring reasonable
expected returns for investors. Other priority
industries include metals, cement and fertiliser
production.
China has moved into a slower growth
phase, and it appears this will last some time.
Opportunities still exist, but greater care is
required tofind them and the riskof poor returns
has increased. Infrastructure projects, particularly
rail and energy, offer the greatest potential, and
the larger cities have become safer bets than
medium to small cities and the hinterland.
iC
IHSGlobal Insight
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around theworld in 30 countries. 80% of Fortune
500 companies are customers of IHS Global Insight.
■
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Direct Investment (FDI) flooding into the
manufacturing sector. As returns have fallen, the
market looks saturated.
Some industries will fare better than others,
notably those favoured by China’s central plan.
These include ecological and environmental
protection, energy infrastructure and grid
construction, social facilities, agricultural and
water conservation, telecommunications/IT and
public services. The government will promote
public-private partnerships and implement
subsidies and subsidised loans to facilitate easier
Total construction
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
MEET.
CONNECT.
EXPAND.
September15–18
JohannesburgExpoCentre
SouthAfrica
International TradeFair forConstruction
Machinery, BuildingMaterialMachines,
MiningMachinesandConstructionVehicles
