2013 Second-Quarter Order Volume and Performance Trend Survey on 59 Listed Construction Companies

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Significant Increase in Public and Private Sectors; Total Order Volume Up 43.8% from Same Period in the Previous Year.

~ However, nearly 40% of companies saw a downturn in the gross profit margin ~

Public-works spending for the 2013 fiscal budget was set at the level of 5.3 trillion yen, up 15% from the 4.6 trillion yen of the previous fiscal year. Accordingly, public works totaling more than 10 trillion yen (including last fiscal year’s supplementary budget of the emergency economic package) has been launched. TDB Economic Trends Research (nationwide) also shows that the construction industry’s economic DI saw an improvement five months in a row and a renewed record high in four consecutive months with an increase to 56.6 in November, up 1.8 points as compared to the previous month. New construction/renovation works and public works have been at their height, due to earthquake disaster reconstruction and last-minute demand before the consumption-tax increase. Additionally, interior finish work is increasing in accompaniment to home construction. Moreover, orders for welfare-related facilities like hospitals and care facilities, as well as construction demands along with capital spending, have been on a favorable trend with governmental institutions and municipalities as well as the private sector. However, there are cases in which bids haven’t been successful because of a surge in construction costs stemming from the lack of construction workers and the escalation of material prices due to yen depreciation. Various other factors of concern remain, such as a decrease in demand as rebound after the consumption-tax increase in this spring.

Teikoku Databank conducted a year-over-year comparison and analyzed the order volume on a stand-alone (non-consolidated) basis, as well as sales, gross margin on sales, and ordinary profit and loss on a consolidated basis from the earnings summary for the second quarter of 2013, as submitted by the listed construction companies nationwide. The companies surveyed comprised 59 listed construction firms (excluding June and September results), but the survey on order volume was conducted with 45 companies whose performance was comparable to the previous year on a stand-alone basis…click here for survey results.

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