China's Construction Output Falls 12.71% in First Half of 2026 as New Contracts Drop 14.13%

In 2025, construction enterprises nationwide completed total construction output of RMB 30.38 trillion, down 5.43% year on year, the first negative growth in recent years, while new contracts signed totaled RMB 31.53 trillion, down 5.51%. In the first half of 2026, construction enterprises nationwide completed total construction output of RMB 11.94 trillion, down 12.71% year on year, and new contracts signed totaled RMB 11.98 trillion, down 14.13%.

In the first half of 2026, among the eight major state-owned construction groups, only China National Chemical Engineering achieved positive growth in all three indicators: new orders, operating revenue and net profit. The other seven all saw declines in total new contracts signed. China State Construction Engineering signed new contracts of RMB 2.46 trillion, down 1.5% year on year; China Railway Group signed RMB 1.01 trillion, down 9.3%; China Communications Construction signed RMB 902.9 billion, down 8.9%; Power Construction Corporation of China signed RMB 619.893 billion, down 9.7%. China Railway Construction Corporation signed total new contracts of RMB 878.158 billion, down 16.85%; China Energy Engineering Group signed RMB 513.188 billion, down 33.81%; and Metallurgical Corporation of China signed RMB 413.64 billion, down 24.5%.

On performance, in the first half of 2026 China State Construction Engineering recorded operating revenue of RMB 975.8 billion, down 11.96% year on year, and net profit attributable to shareholders of the listed company of RMB 23 billion, down 24.34%. China Railway Group recorded operating revenue of RMB 473.1 billion, down 7.69%, and net profit attributable to shareholders of RMB 8.656 billion, down 26.81%. China Communications Construction recorded operating revenue of RMB 333.160 billion, down 1.16%, and net profit attributable to shareholders of RMB 7.277 billion, down 23.95%. China Railway Construction Corporation recorded operating revenue of approximately RMB 428.438 billion, down 12.42%, and net profit attributable to shareholders of RMB 8.690 billion, down 18.80%. China National Chemical Engineering recorded operating revenue of RMB 91.709 billion, up 1.09%, net profit attributable to shareholders of RMB 3.145 billion, up 1.41%, and new contracts signed up 1.65% year on year.

China State Construction Engineering management disclosed at a results briefing that revenue and profit declined in the first half of 2026, while the gross margin rose 0.9 percentage points year on year. Measures taken by the company include declining projects with low returns, poor cash flow or high risk; strengthening cost management; disposing of low-efficiency projects and units; and advancing technology-enabled operations. China Railway Construction Corporation disclosed in its interim report that it deepened regional and industry market research, increased high-level engagement, and strengthened supervision of key project operations.

In the first half of 2026, listed construction companies recorded operating revenue of RMB 3.62 trillion, down 9.1% year on year. Operating revenue of state-owned construction groups and local state-owned enterprises fell 10% and 9% respectively. Listed construction companies recorded net profit attributable to shareholders of RMB 68.4 billion, down 26.2%. Over the same period, operating cash flow of the construction sector showed a net outflow of RMB 413.3 billion, RMB 86.9 billion less than the outflow a year earlier; in the second quarter alone, net inflow was RMB 35.9 billion, RMB 84.5 billion more than the inflow a year earlier. State-owned construction groups recorded a net operating cash outflow of RMB 361.1 billion in the first half, RMB 58.2 billion less than the outflow a year earlier. China State Construction Engineering's net operating cash outflow in the first half decreased by RMB 54.4 billion year on year.