China’s construction sector continued its downward trend in the first quarter of 2026, with both ongoing project areas and fresh starts declining compared to the same period last year, according to data released by the National Bureau of Statistics of China (NBS). The persistent downturn reflects ongoing challenges in the country’s real estate market, which has weighed heavily on demand for building materials, particularly steel, a key input for construction activities.
According to NBS figures released in April 2026, the total floor space under construction in China during the first three months of the year amounted to 5.41737 billion square meters, representing an 11.7% decrease from the 6.13 billion square meters recorded in the first quarter of 2025. This marks the second consecutive year of quarterly decline in ongoing construction activity, following a 10% annual drop in 2025 when the full-year figure reached 6.5989 billion square meters.
New construction starts also weakened significantly, with the floor area of newly commenced building projects totaling 1.2949 billion square meters in Q1 2026 — a 20.3% decrease from the 1.624 billion square meters reported in the same period of 2025. The decline in new starts followed a 20.4% year-on-year drop in Q1 2025, when the figure stood at 5.877 billion square meters, indicating a sustained contraction in fresh project initiation across the sector.
The broader real estate investment landscape mirrored this contraction. Real estate development investment in China totaled 1.77 trillion yuan (approximately $243 billion USD) in the first quarter of 2026, down 11.2% compared to 1.99 trillion yuan in Q1 2025. This continues a trend that began in 2024, when annual real estate investment fell by 17.2% amid worsening developer liquidity and subdued buyer confidence.
Sales of newly built commercial property also declined, with the total floor space sold reaching 1.9525 billion square meters in Q1 2026 — a 10.4% decrease from the 2.179 billion square meters sold during the same period in 2025. The persistent weakness in both investment and sales underscores the depth of the ongoing property sector adjustment, which has grow a defining feature of China’s economic landscape since 2021.
Despite the current downturn, some analysts anticipate a moderation in the pace of decline for steel consumption in the construction sector. The China Metallurgical Industry Planning and Research Institute projected that construction-related steel demand would reach 384 million tonnes in 2026, representing a 4.1% decrease from the 400.4 million tonnes consumed in 2025. While still negative, this forecast suggests a narrowing of the contraction compared to the 12.9% year-on-year drop recorded in 2025.
This outlook was echoed in the World Steel Association’s April 2026 short-term outlook, which noted that while steel demand in China remains under pressure, the rate of decline is expected to ease. The association cited expectations of modest growth in infrastructure investment, supported by local government efforts to maintain GDP growth targets, and suggested that the prolonged downturn in the property sector may largely conclude by 2027.
The construction industry’s struggles have direct implications for China’s steel producers, which have long relied on domestic building activity as a primary source of demand. With property developers scaling back projects and local governments facing fiscal constraints, mills have had to seek alternative markets or adjust output levels to cope with weakening inland demand.
Market analysts note that any sustained recovery in construction activity will likely depend on measurable progress in resolving developer debt issues, stabilizing homebuyer sentiment, and clearer policy signals from Beijing regarding property sector support. Until such conditions emerge, the sector is expected to remain under pressure, with ripple effects felt across related industries including cement, glass, and home appliances.
Officials have not announced any new stimulus measures specifically targeting the construction or real estate sectors as of April 2026. The next scheduled release of quarterly economic data by the National Bureau of Statistics is expected in mid-July 2026, which will provide further insight into whether the current downward trend in construction activity has begun to stabilize.
For ongoing updates on China’s economic indicators, including construction, real estate, and industrial production data, readers can refer to the official publications of the National Bureau of Statistics of China.