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Construction industry of Japan

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In Japan, the mainstay of infrastructure development is the construction industry, which employed 9.4 percent of the labor force in 1990 and contributed some 8.5 percent of GDP. After the two oil crises (1973 and 1979) in the 1970s, construction investment turned sluggish, and the share of construction investment in GNP decreased gradually. In 1987, however, business expanded through investor confidence, continued increase in corporate earnings, improvement of personal income, and rapid rise in land prices. The share of construction investment in GNP rose sharply, especially for more sophisticated and higher value-added private housing and private non-housing structures (see table 19, Appendix). After employment peaking at 9.9% in 2003, the construction industry in Japan has entered a long, steady decline with workers share dropping to 7.0% by 2017.[1] This decline is attributed to gradually slumping demand for the new houses. Japanese construction worker productivity have surpassed US productivity in 2006, but as in 2017, productivity of 0.24 houses/worker*year is still below peak value of 0.32 houses/worker*year in 1992. This downward trend (although less pronounced than in the US) is mostly attributed to the increasing median age of the construction workers. The productivity on concrete-making industry remains on the level along with the most productive countries, with the 1.29 man-hours per cubic meter reported in 2011 (with the leading US having 1.00 man-hours per cubic meter).[2]

Construction starts in FY 1990 covered a total area of about 283 million square meters, with about 134 million square meters exclusively for housing. Total construction costs were estimated in excess of ¥49 trillion.

Although demand for new private housing was expected to grow in the 1990s, even greater growth was expected for new urban office buildings. A number of large projects were under way, suggesting that the construction industry would experience continued growth throughout the 1990s. These include projects for Tokyo's waterfront and other urban redevelopment, highway construction, and new or expanded airports. The growth of Japanese construction industry was actually arrested by Lost Decade economic recession and did not recover fully as in 2017.

Japan's construction technology, which includes advanced earthquake-resistant designs, is among the most developed in the world. Major firms compete to improve quality control over all phases of design, management, and execution. Research and development focuses especially on energy-related facilities, such as nuclear power plants and liquid natural gas (LNG) storage tanks. The largest firms are also improving their underwater construction methods. All of these methods underwent a deep review after the Fukushima Daiichi nuclear disaster in 2011 and Sasago Tunnel collapse in 2012 has exposed a severe problems in work practices of Japanese construction companies.


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 This article incorporates public domain material from the Library of Congress Country Studies website http://lcweb2.loc.gov/frd/cs/.