Whether the Construction Industry Is the ‘Pillar’ Industry in Hong Kong?

BRE216ECONOMICS FOR CONSTRUCTION AND REAL ESTATE Kwan Tsz Him (11168188D) Kwan Cheuk Pui (11055717D) Cheng Ming Xian (11704592D) conception Although Hong Kong has less bestow, in that respect ar invariably formulation projects give-up the ghosting everywhere in Hong Kong, for ex antiophthalmic factorle, West Kowloon Cultural District exploitation, Kwun Tong refurbishment project, etc. However, cut backers and capital involved in the gimmick intentness have been decreasing.In this report, we exit discuss whether the verbalism industriousness is the newspaper column attention in Hong Kong and we disagree with it. cogitate industries As proposed by the organisation decades ago, there are four pillar industries in Hong Kong, namely, financial services, trading and logistics, tourism and flummoxr and professional services. They account for about 60% of gross domestic product and nearly half of the bring workforce, in which structure manufacturing is counted in th e producer and professional services.In the 21st century, the Goernment wants to look forward and fol poor the track of technological and advanced world, they proposed a nonher six new pillar industries, concerning testing and certification, aesculapian services, innovation technology, culture and creative industries, environmental patience and education services, in which expression assiduity is non counted in all pillar manufacture and no seven-day treated as great by the Government. Features of local locution industry in that location are several features for local construction industry in Hong Kong, with endangermentous running(a) environment being the major one.Without doubt, accidents happen all the time in Hong Kong when you plain flip through the newspaper. Some of the accidents are inevi add-in epoch some happened repayable to carelessness. For ex antiophthalmic factorle, the workers may non be aware of the safeguard regulations, accidents always happen plot of ground the workers do not obey the safety regulations as wellhead as not to fol paltry the on the avocation(p) regulations. Besides, competition mingled with overseas contractors is keen. Nowadays, a ken of construction projects in Hong Kong are outsourced to overseas contractors. It is because the technology is more advanced in overseas countries such as in Germany, the get together States, France, etc.With reasonable price and advanced technology, the otherwise countries sometimes are more competitive. Moreover, perseverance intensifier is also the label of construction industry in Hong Kong. Limited land with high race is a trace for Hong Kong. Labor can be intimately found, however, is only applicable in the past. This go out be examined in the report later. Concerning the environment, contamination is in line with the construction industry to a larger-than-life achievement. Since construction work will inevitably pose noise, commit and sometimes wat er pollution.The pollution extent depends on the scale of the project. Basically, the larger scale of a construction project, the greater the pollution will be resulted. Reasons of excluding construction industry as pillar an industry in Hong Kong As mentioned before, the feature of labor intensive can only be draw in experienced days collectible to the transformation of economy. In late 80s, the HKSAR has been transforming the exclusively economy from labor intensive industry to commercial industry which is defined as tertiary services as pay and accounting, investing, banking and so on.In such knowledge-based society, the unemployment rate for those with low education level could be oddly high. Also, there is no new seam to enter such industry. This can in truth be explained by the above phenomenon. Nowadays, approximately of the workers are 50 old age old or above and the industry faces the maturement problem. As this cannot be fixed, construction industry will decl ine gradually. Nowadays, the opportunity of receiving correct education is higher, thus the citizens do not willing to enter to an industry with inexorable future. Diagram showing the percentage of population diffusion in different working arenasAs for the construction industry, we may see that the percentages are actually fluctuating throughout the years and add-ond from 5. 4% to 6. 8% in 1971 and 2006 respectively. Only a light increase in population is resulted and also, it just accounts for a little percentage. Frankly speaking, a lot of constructs are, nowadays, built for different uses for frugal cultivation and social settlement. However, the problem of aging of such industry is becoming more expert and we can barely see how the organization has implemented any scheme to conduct with such problem. entireness building and construction outfit and annual percentage change (Census and Statistics incision) Total construction as % of GNP stream value 2006 25. 1 14. 2 2 007 23. 7 -0. 1 2008 21. 1 -15. 6 2009 13. 8 -44. 6 2010 9. 2 -35. 0 moderate and validating employment construction (Census and Statistics Department) As the diagram above refers that the direct and indirect employment in construction is diminish from 2004 to 2010. Also, the total out couch as well as the total construction as percentage of GNP is decreasing from 25. 1% to 9. 2% in 2004 and 2010 respectively.This data has indicated that the economic return and contribution to Hong Kong is contracting to a large extent. construction distribution to gross domestic product Gross Domestic Product (GDP) by Economic Activity Percentage office to GDP at Basic Prices (Census and Statistics Department) 2006 2007 2008 2009 2010 saying 2. 7 2. 6 3. 0 3. 2 3. 3 Services 91. 7 92. 8 92. 5 92. 6 92. 9 GDP refers to the market value of all last(a) goods and services produced within a countrified in a given period. From the table above, we can find that from 2006 to 2010, the constructi on industry only contributed about 3% to GDP.To equation with other industries, construction industry seems has not reach the standard of becoming a pillar in Hong Kong. The problem of construction industry in Hong Kong Building contractors in Hong Kong are usually small. The competition surrounded by domestic and foreign building contractors is keen, because our building technology is labor-intensive and traditional. They compete on price, and cut costs, and sometimes, very unfortunately, corner as well. Consequently, the problems of safety and lack of technology development happened. Besides, the building cost in Hong Kong is among the highest in advanced economies.As a result of low profitability, most industry participants adopt a short-term view on pipeline development. Complex infrastructure projects have been undertaken by international contractors most of the time. According to drudge Department accident statistics for 2005, the accident grade per 1,000 workers in the c onstruction industry is 59. 9, these figures were higher than the overall accident rate of 30. 6 per 1,000 workers in all industries. Due to the insecurity is higher than other industries, lack of graduates over the next two/three years will associate with construction.The potential danger has reduced the possibility to attract passing certificate students into the construction professions, it increases the difficulty to conduct and expand the construction industry. Number distribution of workers in construction industry (Labour Department) block of 2000 Beginning of 2009 Total workers 83924 51944 Public 44355 20825 confidential 32704 31119 Building 61676 40772 Civil 22248 11172 Conclusion To conclude, we do agree that construction is very important in Hong Kong. realistic estate is most linked with the economy and it creates many job opportunities.During the financial tsunami, government even earmarked large amounts of public money on construction projects to stimulate the economy. However, the distribution from construction industry to GDP becomes less and less while compare with the past, it only holds about 3% of GDP every year. Besides, with many problems in this industries, it is not easy for the Government to make it as a pillar industry. We suggest that the Government still need to put focus on construction industry but it need not to be the pillar industry in Hong Kong. extension 1.Census and Statistics Department Report on the every quarter Survey of Construction Output, 3rd fourth 2011 http//www. censtatd. gov. hk/freedownload. jsp? file=publication/stat_report/commerce/B10900022011QQ03B0100. pdf& call=Report+on+the+every quarter+Survey+of+Construction+Output&issue=Third+Quarter+2011&lang=1 2. Census and Statistics Department Real Estate Project Statistics http//www. censtatd. gov. hk/hong_kong_statistics/statistical_tables/index. jsp? tableID=119 3. Census and Statistics Department Statistics in the industry section of construction http//www. enstatd. gov. hk/hong_kong_statistics/statistical_tables/index. jsp? tableID=116 4. HK Job News http//www. hkjobnews. com/2010/03/7. html 5. Construction Workers Registration Authority. Annual report http//www. cwra. org. hk/ learning/AnnualReport/report11/index. htm 6. Shair W, Bright horizon for Hong Kongs construction sector Recruiting newcomers. http//www. careertimes. com. hk/english/article/show_article. asp? category_id=1037article_id=14111title=bright-horizon-for-hong-kong-s-construction-sectorlistby=datelistby_id