According to the latest issue of RLB Construction Cost Update HK Report, it is projected that the tender price index will rise moderately in the coming quarters.
Hong Kong’s economy exhibited resilience in second quarter of 2023, remaining on its path of recovery amid challenges from the global economic slowdown. However, the pace of this recovery decelerated despite improved inbound tourism and private consumption, resulting in a more gradual increase in GDP subsequent to previous quarter. The construction industry witnessed growth during this period with 5.6% increase in expenditure on building and construction. Specifically, the public sector contributed a 6.3% rise, while the private sector experienced a 5.0% increase.
The government has earlier endorsed the enhancement of the coverage and operation of the Supplementary Labour Scheme. Applications for the program have been received and skilled workers are expected to arrive by the end of 2023. Their arrival is expected to address the labor demands in the construction sector. On the other hand, the global economy has been impacted by a prolonged period of extensive monetary tightening with central banks continuing to implement interest rate hikes. The effects of this tightened monetary policy have a delayed impact on the real economy, and it remains to be seen how this will unfold in the future. Looking ahead, the tender price index is projected to experience a moderate increase in the upcoming quarters, reflecting a softened momentum of economic recovery.