Japan Construction Industry Report 2026: Output To Grow By 1.5% This Year Before Registering An AAGR Of 1.2% Between 2027-2030, Driven By Investments In Renewable Energy And Transportation

(MENAFN- GlobeNewsWire - Nasdaq) The Japanese construction industry offers significant opportunities with growth driven by increased construction orders, tourism, government investment, and renewable energy projects. Key prospects include renewable energy, transportation, industrial projects, and semiconductor manufacturing, despite short-term investor confidence challenges.

Dublin, April 07, 2026 (GLOBE NEWSWIRE) -- The "Japan Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2030 (H1 2026)" report has been added to ResearchAndMarkets's offering.
Japanese construction industry to grow by 1.5% in real terms in 2026, supported by an increase in the total value of construction orders received, complemented by rising tourism and non-residential construction activity.

According to Japan's Statistics Bureau, the total value of contracts received for overall construction grew by 5.3% year-on-year (YoY) in the first 10 months of 2025, while that for building activity it grew by 4.5% YoY during the same period. Growth in the construction industry will also be driven by the government's investments under the fiscal year 2026-27 (FY2027) (April 2026 - March 2027) Budget, which was approved by the Japanese cabinet in late December 2025.

The FY2027 draft budget includes a total spending of JPY122.3 trillion ($841.1 billion), with JPY39.1 trillion ($268.6 billion) for social welfare and security, JPY9 trillion ($62.2 billion) for the defense sector and another JPY6.1 trillion ($42 billion) for the maintenance and upgrade of water and sewerage infrastructure in the country.

However, rising bankruptcies within the real estate market, coupled with a significant labor shortage, is expected to adversely affect the investor confidence and hinder construction activities in Japan in the short term. According to the Cabinet Office, the average Business Confidence Index fell by 2.4% YoY in the first 11 months of 2025, following a marginal annual decline of 0.2% in 2024.
However, over the forecast period, the Japanese construction industry is expected to register annual average growth of 1.2% between 2027 and 2030, supported by investments in renewable energy, transportation and industrial projects. The government of Japan is also planning to raise the renewable electricity share in Japan's total energy mix to 36%-38% by 2030, from 23% in 2023.

Furthermore, it 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). To support the set goals, Japan is rapidly investing in floating offshore and onshore wind energy projects. In a move to attract and encourage investments in the semiconductor manufacturing sector, the Japanese government has also announced a new funding package in November 2025, which comprises JPY1 trillion ($6.9 billion) in investment and subsidies between fiscal 2026 and 2027.

Report Scope

• 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

Key Topics Covered:
1 Executive Summary
2 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
For more information about this report visit

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