According to the latest issue of RLB Construction Cost Update HK Report, the tender price index is forecast to experience a marginal decline with modest fluctuations within a narrow range over the coming quarters.
Hong Kong’s economy recorded a solid expansion in the first quarter of 2025, supported by stronger exports of goods and services and a rebound in overall investment spending, even as private consumption remained subdued. However, the construction sector continued to contract, though the pace of decline eased compared to the previous quarter. According to the Census and Statistics Department’s latest data, nominal construction expenditure fell by 2.3% year-on-year, with private investment down 2.9%, reflecting cautious sentiment amid evolving market conditions. Public construction spending also declined by 1.5% year-on-year, showing further signs of recovery from earlier periods.
The 2025-26 Budget prioritizes Hong Kong’s Green City initiative, emphasizing sustainable urban development and green infrastructure. Development of Smart and Green Mass Transit Systems will accelerate through expedited tendering for key projects: Kai Tak, East Kowloon, and the Hung Shui Kiu/Ha Tsuen and Yuen Long South New Development Areas. These initiatives will enhance the prevalence of green transportation. Concurrently, the San Tin Technopole development was launched as a strategic component of the Northern Metropolis plan. This initiative is dedicated to advancing innovation and technology development in Hong Kong, with the objective of establishing an “international Innovation and Technology city.” The project encompasses the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) at the Lok Ma Chau Loop.
The moderation in year-on-year building and construction expenditure decline is supported by planned private housing production under the Long-Term Housing Strategy, sustained commitment to large-scale public housing projects, easing global trade tensions, and steady Mainland economic growth. Nevertheless, persistent uncertainties regarding US trade policy and monetary direction, present significant geopolitical and economic headwinds. The tender price index is projected to experience a marginal decline with modest fluctuations within a narrow range over the coming quarters.
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