Goldman Sachs, Morgan Stanley and UBS predict further

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The ten largest investment banks, including Goldman Sachs, Morgan Stanley and UBS, expect the decline in the construction sector to continue in China in 2024. This would limit the country's economic growth, especially given the low capacity that They have had the government's efforts to reverse the situation.



If the forecasts come true, it would mean the third Job Seekers Phone Numbers List consecutive year of contraction in the Chinese sector, which fell 8% year-on-year in the first 11 months of 2023, a figure that reaches 8.4% decline if we talk about the Whole year.



Despite the measures taken by the Chinese Government, most of them aimed at motivating purchases , the prolonged recession has meant that the sector's capacity as a driver of demand for goods and services has been limited. Not in vain, the demand for the real estate sector represents 20% of GDP , while in 2018 it was 24%, according to Bloomberg estimates.





Falls of around 7%

Goldman Sachs is one of the most pessimistic regarding the contraction of the sector, since it expects a drop of up to double digits, while Morgan Stanley predicts it will be 7% and UBS remains at 5%. For its part, the China International Merchants Bank believes that investments will plummet by 7%.



The drop in sales , along with the lack of new real estate projects, are the main causes for pessimism, since Goldman and UBS also predict drops of up to 5% in sales in the sector. This implies that completed projects also have room to decrease.



The collapse of one of the most important sectors of the Asian country's economy is a good explanation for the weakness of domestic demand, which has become one of the main reasons for the deflation suffered by China this year.



Plans to increase GDP by 5%

To achieve the Government's plans to increase GDP by 5% in 2024, significant economic and fiscal stimuli would be needed to offset the burden posed by the real estate sector. However, not all analysts are pessimistic about the fate of the sector in China.



Logan Wright, director of China market research at Rhodium Group, expects construction to grow next year, albeit in the single digits. This data is based on the improvement in land sales by governments.



It is worth noting that many economists believe that the Chinese government will try to stabilize the sector through measures that would include purchasing excess housing through greater use of funds from the country's Central Bank.