Academics engaged in a cross-institutional study of sustainable development of the construction industry of Hong Kong are calling the HKSAR Government for a long-term policy and operation mechanism to achieve a sustainable development for the industry. They believe that severe "boom-bust" cycles are detrimental to the industry development.
The multi-disciplinary study entitled "Reinventing the Hong Kong Construction Industry for its Sustainable Development" was conducted by academics from the Department of Civil Engineering of The University of Hong Kong (HKU) and the Faculty of Construction and Land Use of The Hong Kong Polytechnic University (PolyU) in collaboration with the Construction Industry Institute, Hong Kong (CII-HK). The research team was led by Professor Lee Chack Fan, Chair Professor in Geotechnical Engineering, HKU and Professor Andrew Baldwin, former Dean of Faculty of Construction and Land Use, PolyU. The research project was commenced on 1st October 2006 and lasted for 15 months.
Releasing the findings of the study today (November 20), Professor Lee Chack Fan said: "It is essential that we continue to join forces of this kind with the industry and other sister academic institutions in order to identify the available opportunities and the way forward for developing the construction industry of Hong Kong in a sustainable manner."
Dr. Thomas Ng, Associate Professor, Department of Civil Engineering of HKU, said the construction industry has been contributing significantly to Hong Kong's economy and employment for decades. In the 2007, the Hong Kong construction industry produced a total gross value of work of nearly HK$93 billion, representing a ratio of 5.7% of the total GDP. The industry employed more than 260,000 people in the 2nd quarter of 2008, representing 7.4% of the total labour force. The development of the industry deserves Government attention.
"Unfortunately, the total construction output has shrunk dramatically in 2007 by 30% from its peak volume in 1997, primarily due to the Asian financial turmoil. The construction industry has been undergoing a consolidation and retrenchment process in recent years. There is also a shift in market structure with repair and maintenance works currently contributing to over half of the local construction market. Timely diversification and appropriate adjustments in business model are needed to adapt to the recent transformations in market structure of the industry," said Dr. Ng.
"Many construction stakeholders have recently participated in projects outside the territory, e.g. the emerging markets in the Middle East and India. All practitioners should continuously strive to sharpen their competitive edge and identify opportunities of exporting construction expertise outside Hong Kong so as to achieve sustainable growth. The Government is urged to support the construction services sector by improving the platform for cooperation with industry stakeholders in overseas countries and offering export credit or export credit insurance," Dr. Ng proposed.
"Yet, we believe that the global financial crisis may result in a sharp decline in private construction in the next two years. If the 10 major infrastructure projects are not realised swiftly, the local economy will lack the impetus generated from the construction output and the unemployment problem in the construction industry is very likely to be worsened," added Dr. Ng.
Professor Albert Chan, Professor and Associate Head, Department of Building and Real Estate of PolyU, said the research team urged for expediting the implementation of the 10 major infrastructure projects, as stated in the 2007-08 Policy Address, as well as other public capital works.
"Owing to the period of our study, the findings cannot take into consideration of the impact of the prevailing global financial crisis. But we still believe that expediting the launch of major public capital works will be beneficial to local economy, as it can stimulate the economy and create enormous employment opportunities for construction workers. In the long-run, a centralised planning body should formulate a long term vision of the industry and to coordinate at a macro level the overall output of the construction sector. The aim shall be to maintain an output level which enables the industry to develop its technical capacity, preserve the skill sets of practitioners and most importantly retain trained workers, while preventing severe boom and bust cycles," Professor Chan said.
Ir. Raymond Cheung, Executive Board Chairman of CII-HK, said that apart from implementing the major infrastructure work, it is imperative to formulate long-term planning in investing in urban redevelopment, repair and maintenance for ageing buildings, improvement of community environment, and the provision of public housing and community facilities for the elderly, etc. This would not only enhance the local living standard, but also provide relatively stable construction volume and employment opportunities.
For media enquiries, please contact:-
Dr. Thomas Ng
Associate Professor, Department of Civil Engineering, HKU
Tel: 2857 8556
Ms. Denise Wong
Manager (Media), External Relations Office. HKU
Tel: 2859 2600
Prof. Albert P.C. Chan
Associate Head, Department of Building and Real Estate, PolyU
Tel: 2766 5814
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