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Nippon Steel's Survey on Construction Demand and Labor Shortages

Nippon Steel's Architectural Systems, headquartered in Minato, Tokyo, conducted a survey of its member organization, consisting of around 1,500 construction companies across Japan. The survey, targeting 999 companies, aimed to uncover current trends in new projects and labor shortages in the construction industry.

Summary of Findings

• - Rising New Project Inquiries: 39% of companies reported an increase.
• - Increase in Renovation Work: 50% indicated a higher ratio of renovation projects.
• - Recent Project Rejections: 78% experienced project rejections due to labor shortages and budget constraints.
• - Labor Shortage: The main deficits are in site managers and field workers.

New Project Inquiries on the Rise

The survey indicated that 39% of respondents saw an uptick in new project inquiries. This increase is attributed to the booming demand for logistics facilities and data centers due to AI advancements. However, the responses showed that 35% reported 'no change', and 26% noted a decrease, suggesting a polarized environment in project availability. Many firms cited difficulties in securing necessary manpower and rising material costs as significant challenges. The ability to respond to inquiries effectively hinges on having the right construction structure in place, marking a pivotal shift in competitiveness for construction firms moving forward.

Renovation Work Demand Expanding

Half of the surveyed companies (50%) observed an increasing share of renovation work in their portfolios. The aging infrastructure of industrial facilities requires attention due to the deterioration from when they were first established in Japan's rapid economic growth period. Additionally, the need for automating equipment and energy efficiency measures enhances the urgency for renovation projects. Therefore, the construction sector must view renovation as a critical growth area alongside new builds, as this could significantly influence market competitiveness.

78% of Firms Reject Projects Due to Labor and Cost Constraints

The study revealed that 78% of participating companies have turned away projects due to labor shortages and budget limitations. These challenges linger even in sectors experiencing growth, such as logistics and manufacturing facilities. The complexity of renovation projects, requiring non-disruptive operations and short turnaround times, compounds these challenges. Thus, a mismatch between demand and supply continues to impede firms from seizing valuable ordering opportunities.

Key Labor Shortages: Site Managers and Field Workers

The most significant shortfall was reported for site managers (77%), followed by field workers (57%) and partner companies (42%). Industrial facility construction and renovation necessitate a high level of safety and management, especially when operations must continue without interruption. Additionally, the aging workforce and migration of young talent hinder the transfer of critical skills in the industry. The need extends beyond merely filling positions; it necessitates enhancing management capabilities and technical know-how while fostering strong networks with partner companies.

Remarks from Takaya Tsuruta, Director of Nippon Steel Architectural Systems

Takaya Tsuruta acknowledged that the construction industry is witnessing a parallel rise in demand for both new builds and renovations. Industries like manufacturing and warehousing are confronted with increasingly intricate and diverse needs that traditional construction methodologies can no longer adequately address. Especially when rapid responses are mandated without halting operations, the existing manpower constraints and construction framework significantly restrict companies' growth opportunities. One effective solution proposed is Nippon Steel’s 'system building' model, which standardizes design and construction processes, ensuring quality and efficiency with limited personnel. This model has already garnered significant acclaim in many renovation projects.

Nippon Steel's Architectural Systems aims to advance innovative methodologies in construction to meet the industry's evolving challenges, ensuring ongoing workforce development and robust partnerships within the sector.

Survey Overview

• - Participants: 999 member companies from Nippon Steel’s Architectural Systems.
• - Method: Online surveys conducted.
• - Duration: May 30, 2025 - July 10, 2025.

About Nippon Steel’s Architectural Systems

As a leading specialty manufacturer of system buildings, Nippon Steel's Architectural Systems has over 200 successful projects annually. Leveraging over 50 years of experience, the company excels in providing high-quality systems through prefabrication techniques, ensuring cost efficiency and prompt delivery, while facilitating stable access to high-quality steel materials.

Head Office: 1-9-2 Higashi-Shinbashi, Minato, Tokyo
CEO: Tomo Uno
Founded: October 1, 2007
Website: Nippon Steel's Architectural Systems