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Moody’s expects sluggish growth for China’s construction sector

by ChemOrbis Editorial Team -
  • 25/05/2016 (12:09)
According to media reports, Moody’s expects China’s construction sector to remain stagnant due to slowing revenue growth this year. According to Lu Chenyi, vice president and senior analyst at Moody’s, the construction sector will record a single digit increase in revenue similar to the 2% increase in 2015, which was down from 8.7% in 2014. Unfinished projects and a great deal of delayed orders from construction companies were cited as the reason behind analysts’ expectations of sluggish construction growth in China.

Both residential and commercial building starts are likely to soften during the next 12 to 18 months on the back of the slowing economy, slackening property sales and an increasing number of developed but unsold properties in lower-tier cities. Despite a jump in property sales in the first quarter, high inventories prevented developers from launching new projects.

Moody’s thinks that the government will maintain investments in railways, highways and road expansion this year to boost economic growth and improve inter- and intra-regional connections.
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