Japan’s declining population to affect annual housing starts

Japan’s housing and construction sector will continue to contract in the medium term, with national annual housing starts estimated to be around 600,000 by 2025. Building activity will mostly be limited to refurbishing aging infrastructure instead of increasing the stockpile of new homes, against the backdrop of declining number of households, according to the Japan Center for Economic Research (JCER). In some prefectures the number of households has already started to fall.

Construction activity in the non-housing sector (offices and retail) is expected to remain flat. Non-residential construction is also susceptible to the population decline. The sectors in which domestic production will grow are processing and assembly type manufacturing sectors, including general machinery, transport machinery, health and nursing care, as well as business services sectors.

Activity in the agricultural, forestry and fishing sectors will also fall due to the aging of the workforce in these sectors and increasing reliance on imports. Labour shortages are already evident in the health, nursing care and construction sectors. 


Source: ITTO