Japan Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2030 (H2 2026)

Summary

Japan’s construction industry is expected to shrink marginally by 0.2% in real terms in 2026, owing to weak building construction activity amid increasing energy prices and higher policy rates. According to the Statistics Bureau, the total floor area of construction starts decreased by 8% year-on-year (YoY) during the first five months of 2026, following declines of 6.7% in 2025 and 7.6% in 2024. Market conditions remain challenging, with rising real estate bankruptcies, persistent shortages of skilled labor, and higher construction input costs continuing to constrain investment and project execution. The industry is also expected to face headwinds from an unfavorable macroeconomic environment.

However, the industry is expected to rebound marginally by 0.4% in 2027, before accelerating to an average annual growth of 1.3% from 2028 to 2030, supported by investments in renewable energy, transportation, and industrial projects. The government of Japan is planning to raise the renewable electricity share of Japan’s total energy mix to 36%-38% by 2030, from 23% in 2023. Furthermore, it also plans to achieve 40%-50% renewable energy and 20% nuclear power by 2040, along with deploying 30GW of battery storage by 2040, under Japan’s seventh Strategic Energy Plan (SEP). Growth over the forecast period will also be supported by rising public and private investment in advanced technologies and digital infrastructure. In June 2026, the Japanese government unveiled a long-term investment strategy targeting more than JPY370 trillion ($2.5 trillion) in combined public and private investment by fiscal 2040 (April 1, 2040, through March 31, 2041) across strategic sectors, including artificial intelligence (AI), semiconductors, space, defense, shipbuilding, autonomous driving, data centers, and energy storage.

The analyst’s Construction in Japan - Key Trends and Opportunities to 2030 (H2 2026) report provides detailed market analysis, information, and insights into the Japanese construction industry, including:

The Japanese construction industry's growth prospects by market, project type and construction activity
Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Japanese construction industry
Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Japan. It provides:

Historical (2021-2025) and forecast (2026-2030) valuations of the construction industry in Japan, featuring details of key growth drivers.
Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
Assess market growth potential at a micro-level with over 600 time-series data forecasts
Understand the latest industry and market trends
Formulate and validate business strategies using the analyst's critical and actionable insight
Assess business risks, including cost, regulatory and competitive pressures
Evaluate competitive risk and success factors

1 Executive Summary2 Construction Industry: At-a-Glance

3 Context

3.1 Economic Performance
3.2 Political Environment and Policy
3.3 Demographics
3.4 Risk Profile

4 Construction Outlook

4.1 All Construction

Outlook
Latest news and developments
Construction Projects Momentum Index

4.2 Commercial Construction

Outlook
Project analytics
Latest news and developments

4.3 Industrial Construction

Outlook
Project analytics
Latest news and developments

4.4 Infrastructure Construction

Outlook
Project analytics
Latest news and developments

4.5 Energy and Utilities Construction

Outlook
Project analytics
Latest news and developments

4.6 Institutional Construction

Outlook
Project analytics
Latest news and developments

4.7 Residential Construction

Outlook
Project analytics
Latest news and developments

5 Key Industry Participants

5.1 Contractors
5.2 Consultants

6 Construction Market Data

7 Appendix

7.1 What is this Report About?
7.2 Definitions
7.3 CRI Methodology

About the Analyst
Contact Us

List of Tables

Table 1: Construction Industry Key Data
Table 2: Japan, Key Economic Indicators
Table 3: Japan, Commercial Construction Output by Project Type (Real % Change), 2021-30
Table 4: Japan, Top Commercial Construction Projects by Value
Table 5: Japan, Industrial Construction Output by Project Type (Real % Change), 2021-30
Table 6: Japan, Top Industrial Construction Projects by Value
Table 7: Japan, Infrastructure Construction Output by Project Type (Real % Change), 2021-30
Table 8: Japan, Top Infrastructure Construction Projects by Value
Table 9: Japan, Energy and Utilities Construction Output by Project Type (Real % Change), 2021-30
Table 10: Japan, Top Energy and Utilities Construction Projects by Value
Table 11: Japan, Institutional Construction Output by Project Type (Real % Change), 2021-30
Table 12: Japan, Top Institutional Construction Projects by Value
Table 13: Japan, Residential Construction Output by Project Type (Real % Change), 2021-30
Table 14: Japan, Top Residential Construction Projects by Value
Table 15: Japan, Key Contractors
Table 16: Japan, Key Consultants
Table 17: Japan Construction Output Value (Real, $ Million)
Table 18: Japan Construction Output Value (Nominal, JYP Billion)
Table 19: GlobalData Construction Market Definitions
Table 20: GlobalData Construction Market Definitions
Table 21: Ratings, Scores and Definitions

List of Figures

Figure 1: North-East Asia, Construction Output (Real % Change), 2024-30
Figure 2: Japan, Construction Output by Sector (Real % Change), 2024-26 and 2027-30
Figure 3: Japan, Risk Summary
Figure 4: Japan, Risk Regional Comparison
Figure 5: Japan, Construction Output Value (Real, $ Million, 2022 Prices and Exchange Rate), 2021-30
Figure 6: Japan, Construction Output Value, by Sector (Real, $ Million), 2021-30
Figure 7: Japan, Total Value of Private Sector Investments on Buildings (JPY Billion)
Figure 8: Japan, Total Floor Area of Building Construction Started, % Change YoY
Figure 9: Japan, Value of Contracts Received for Construction, Nominal (JPY Billion)
Figure 10: Japan, Index of Business Confidence (2020=100)
Figure 11: Japan, Construction Projects Momentum Index
Figure 12: (Region Name), Construction Projects Momentum Index
Figure 13: Japan, Commercial Construction Output by Project Type (Real, $ Million), 2021-30
Figure 14: Japan, Commercial Construction Projects Pipeline, Value by Stage ($ Million)
Figure 15: Japan, Foreign Visitor Arrivals (in Thousands)
Figure 16: Japan, Wholesale and Retail Trade, % Change YoY
Figure 17: Japan, Total Area of New Construction Starts in Wholesale and Retail Industry (Thousand m2)
Figure 18: Japan, Total Area of New Construction Starts in Accommodation and restaurant services (in thousand m2)
Figure 19: Japan, Industrial Construction Output by Project Type (Real, $ Million), 2021-30
Figure 20: Japan, Industrial Construction Projects Pipeline, Value by Stage ($ Million)
Figure 21: Japan, Total Area of New Construction Starts in Manufacturing Industry (in thousand m2)
Figure 22: Japan, Manufacturing Production Index (2020=100), Seasonally Adjusted
Figure 23: Japan, Overseas Machinery Orders (JPY billion)
Figure 24: Japan, New Motor Vehicle Sales (in Thousands)
Figure 25: Japan, Exports (JPY Trillion)
Figure 26: Japan, Infrastructure Construction Output by Project Type (Real, $ Million), 2021-30
Figure 27: Japan, Infrastructure Construction Projects Pipeline, Value by Stage ($ Million)
Figure 28: Japan, Value of Contracts Received for Civil engineering Construction (JPY Billion)
Figure 29: Japan, Energy and Utilities Construction Output by Project Type (Real, $ Million), 2021-30
Figure 30: Japan, Energy and Utilities Construction Projects Pipeline, Value by Stage ($ Million)
Figure 31: Japan, Total Area of New Construction Starts in Information and Communication Industry (Thousand m2)
Figure 32: Japan, Institutional Construction Output by Project Type (Real, $ Million), 2021-30
Figure 33: Japan, Institutional Construction Projects Pipeline, Value by Stage ($ Million)
Figure 34: Japan, Total Area of New Hospitals Construction Starts (Thousand m2)
Figure 35: Japan, Residential Construction Output by Project Type (Real, $ Million), 2021-30
Figure 36: Japan, Residential Construction Projects Pipeline, Value by Stage ($ Million)
Figure 37: Japan, Private Residential Investments (JPY Billion)
Figure 38: Japan, Consumer Confidence Index, Seasonally Adjusted
Figure 39: Japan, Number of New Construction Starts of Dwellings (in Thousands)
Figure 40: Japan, Existing Home Sales in Tokyo and Osaka Metropolitan Areas, % Change YoY
Figure 41: Japan, Residential Property Price Index (2010=100)
Figure 42: Japan, Total Number of Bankruptcies in Real Estate Industry
Figure 43: Japan, Headquarters of Key Contractors (% of Total Project Pipeline)
Figure 44: Japan, Headquarters of Key Consultants (% of Total Project Pipeline)

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