Construction market statistics can be used to make informed decisions on market development
Authors: David Fell and James Poon, FPInnovations
Construction market statistics provide government, industry, and associations with a basis for making decisions on strategic direction and investments. For example, in the past a strong understanding of residential and non-residential statistics in Canada and the US contributed to the successful development of the wood mid-rise construction sector. Today, market statistics help guide the approach to tall wood construction.
Unfortunately, there is not adequate construction data in China at this time put forward a similar data-based strategy for market development. Better information of building size, height, and material would provide key insights into where the opportunities for wood construction are. This enhanced market knowledge would not only benefit industry, but it could provide Chinese planners with insights on how a shift to wood construction could potentially reduce the carbon footprint of the built environment.
What do we know?
China already has good data available to provide us insights on the health of the construction market. For example, in 2014, China started 1.25 billion square metres of residential construction. In the same year 1.05 billion square metres of new residential construction was sold, accounting for 10.1 million housing units. When building common areas are accounted for (assuming 20% of floor area is not saleable) this puts the Chinese real estate market as a whole in relative balance in 2014.
We are also able to break this information down on a more granular level (provincial/regional/municipal). Using this approach, we know that there are vast regional differences as the ratio of construction sold –to-started varies. In Shanghai, during 2014, 1.44 square metres of completed and future residential construction was sold for every 1 metre that was started, indicating high future construction activity. On the other hand, in Shanxi the overall ratio of sales to starts was only 0.65, indicating low demand.
However, while this type of data is a good indicator of market activity, it provides little information for targeting wood building systems to specific markets.
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What do we need to develop an understanding of the wood construction sector?
There are a number of key statistics that would help in the development of strategies around wood construction. It is hoped that in the coming months Canada Wood, with assistance from FPInnovations, will conduct an investigation with MOHURD to determine the feasibility of collecting additional statistics. Examples of statistics that would be useful include:
- Number of buildings started
- Statistics by number of storeys (floor area and number of units)
- Units started
- Primary construction material
In China the challenge is this data lies with thousands of local permitting offices across the country. A system needs to be developed to funnel the data into a centralized location. The next step is to collaborate with one single municipal department to learn what statistics they currently collect and to see what they are willing to share. Once we understand what is possible to do with a single jurisdiction, we can start to consider how to consolidate construction data from across the country. Through addressing statistics of common interest for both MOHURD and Canada Wood this initiative is most likely to move forward.