Chinese building decoration market to see urbanisation growth of 1%

The Chinese building decoration market increased at an average annual growth rate (AAGR) of 10.7% over 2006-2010, rising from a valuation of RMB1.4 trillion to reach a market value of RMB2.1 trillion.

With the aggressive development of the economy, China's pace towards urbanisation over the years has been accelerated, a large number of new houses and public facilities have provided huge space for the development of the building decoration industry.

In 2006-2010, China's urbanisation rate rose from 42.99% to 49.68%, with an average annual increase of 1.34 percentage points, which stimulated construction demand of 800 million square meters.

The central government increased its investment in infrastructure construction to stimulate the Chinese economy that year, increasing demand for building completion services in 2010 and the years that followed. Industry revenue increased by 7.9% in 2010. In 2011, revenue rose 14.9% due to the construction of indemnificatory housing promoted by the government in 12th Five-Year Plan.

The Plan makes a review of the industry development over the past five years in all aspects of environment, enterprises, influencing factors and existing problems; meanwhile, based on the current economic situation as well as prospects for urbanisation propulsion process, combined with the industry development status, it formulates clear goals for the building decoration industry and specific measures to achieve them.

It is expected that in the 12th Five-Year Plan period (2011-2015), China's urbanisation ratio will see annual growth of nearly one percentage point, and about 13 million of the agricultural population will transform into urban population, thus directly stimulating construction demand of over 600 million square meters.

Companies in this industry's different service segments face different entry barriers to the industry. Fewer barriers to entry exist in the household completion and decoration segment as most household decoration projects are small-scale and therefore have lower requirements for capital and human resources. There are higher entry barriers in the public building completion and decoration markets, and curtain wall decoration markets.

For more information on the Chinese building decoration market, see the latest research: Chinese Building Decoration Market

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