中国建筑行业展望，2025年1月

Investment Rating - The investment rating for the construction industry is maintained at a stable but weakened outlook, indicating a decline in overall credit quality over the next 12 to 18 months, yet still above a negative status level [2]. Core Insights - The construction industry is facing significant challenges due to the real estate sector remaining in a bottom recovery phase, which is adversely affecting overall industry growth and profitability [2][9]. - Infrastructure investment continues to provide support for the construction market, but the overall growth rate of total construction output in 2025 is expected to remain low due to ongoing financial constraints and insufficient improvement in downstream payment and investment demand [7][22]. - The competitive landscape is shifting, with state-owned enterprises showing more operational flexibility compared to local state-owned enterprises, which exhibit regional differentiation in performance [2][24]. Summary by Sections Analysis Approach - The report analyzes the construction industry's demand and output, focusing on the interrelation with real estate development, infrastructure, and manufacturing investment trends [8]. Industry Fundamentals - The construction industry is order-driven, heavily influenced by downstream investment demand and the financial status of owners. The real estate market has seen a 9.6% decline in development investment in 2023, while infrastructure investment grew by 5.9% [9][10]. - The total output of the construction industry reached 31.59 trillion yuan in 2023, with a year-on-year growth of 5.8%, reflecting a slight decline in growth rate [9][10]. Financial Performance - The financial performance of construction enterprises has weakened, with a 5.85% decline in revenue for sample enterprises in 2024, marking a significant downturn compared to previous years [34][35]. - The average gross profit margin for sample enterprises has slightly decreased, with a notable increase in impairment provisions, particularly among private enterprises, which face greater impacts from the real estate market [36][38]. - The overall debt levels of construction enterprises have increased, with bank loans remaining the primary financing channel, accounting for approximately 70% of total debt [46]. Conclusion - The construction industry is expected to face continued pressure from the real estate sector, with infrastructure investment providing some support but not sufficient to offset the downturn in construction demand [22][24]. - The competitive dynamics are evolving, with state-owned enterprises better positioned to navigate the challenges compared to local and private enterprises, which are likely to continue facing operational difficulties [24][29].