Japan construction investment forecast to rise 4.7 percent in FY2025
- Adam German
- Oct 14
- 1 min read
On October 10th, the Construction and Economy Research Institute and the Economic Research Institute of the Economic Research Association released their “Construction Investment Outlook Based on the Construction Economy Model (October 2025)”.
Photo by Se. Tsuchiya on Unsplash
The report incorporates the second preliminary GDP figures for the April–June 2025 quarter and projects construction investment trends for fiscal years 2025 and 2026.
Construction Investment Expected to Rise in FY2025
Total construction investment for FY2025 is projected to reach ¥76.67 trillion, a 4.7% increase from the previous year.
Government-sector investment (total government investment excluding repair and renovation spending) is forecast at ¥23.61 trillion, up 5.4% year-on-year.
Private Housing Investment to Dip in Volume but Hold Steady in Value
Private housing investment is expected to total ¥16.32 trillion, roughly unchanged from the previous year with a slight 0.9% increase.
Although housing starts are projected to decline 10.3% to 732,000 units due to a post-surge drop following last year’s rush to build before stricter energy-efficiency standards took effect, rising construction costs are expected to offset the decline in unit numbers.
FY2026 Outlook: Continued Growth Expected
For FY2026, overall construction investment is projected to rise 5.3% to ¥80.73 trillion. Government sector investment is forecast to reach ¥25.81 trillion (+9.3%), while private housing investment is expected to climb to ¥17.07 trillion (+4.6%).
Housing starts are projected to rebound to 768,000 units (+4.9%), recovering from the previous year’s downturn, with both nominal and real investment values expected to increase.
Further Reading:
ENG Construction Investment Outlook Based on the Construction Economy Model
JPN Construction Investment Outlook Based on the Construction Economy Model (offers more detailed information than the ENG report above)
Source:
R.E. Port News (Japanese only)
