Construction in Asia: An outlook

Asia’s construction industry is poised for transformative growth and change in 2025, driven by pressing global challenges: climate change, rapid urbanization, and technological disruption. In this crucial decade for climate action, while countries are investing heavily to enable sustainable development, the construction industry is recalibrating to meet evolving needs and achieve meaningful change.

Sustainability as Asia’s guiding star

Our built environment is a significant contributor to emissions and is set to undergo a sustainability transformation in the years ahead. Asia, home to some of the world’s largest emitters of greenhouse gases countries in steel, cement and chemical sectors, is shifting its focus to achieving carbon net zero in the region. A stronger focus on net-zero carbon targets across the region will drive the adoption of greener infrastructure in urban planning, transport, buildings and places, energy systems, and much more. National and regional initiatives such as the ASEAN Catalytic Green Finance Facility provide funding and technical assistance to de-risk projects for environmentally friendly and socially inclusive infrastructure in the energy, water, transport, and urban sectors.

As this approach becomes the norm, sustainable design will inevitably become a cornerstone of development, employing innovative solutions that prioritize energy efficiency, renewable integration, and resource conservation. The use of green materials and low-impact construction methods will become standard, shaping a future where growth is carefully balanced with environmental responsibility. Globally, The Cement 2 Zero, a UK-based demonstrator project led by the Materials Processing Institute, supported by the University of Cambridge, and in collaboration with AtkinsRéalis and other key players in the supply chain, will help Cambridge Electric Cement (CEC) to produce 20 tonnes of the world’s first zero emissions cement on an industrial scale.

In Asia, efforts have been made by countries to encourage and promote the use of green materials in construction practices, paving the way for the future decarbonization of new buildings and infrastructure – from Singapore’s Green Building Masterplan policy framework that aims to green 80% of the nation’s building by 2030, to China’s implementation of its Green Building Evaluation Standard to rate buildings’ sustainable construction performance.

The integration of digital technologies

Technological developments, and in particular digital solutions, are now paving the way for smarter and more connected cities. In 2024, construction and engineering firms have been actively exploring the potential of embedding artificial intelligence into their operations and work on buildings, spaces, and infrastructure.

In 2025, the emphasis will likely shift toward strengthening integrated, end-to-end solutions that encompass the entire project lifecycle. For example, Asia is set to lead the charge in construction equipment telematics – integrated systems which enhance operational efficiency, real-time monitoring, and asset management. Digital twins (virtual models) and advanced data analytics will also play a pivotal role in reshaping project planning and maintenance, enabling more efficient and predictive approaches to develop and manage infrastructure. At the same time, new open-source tools can help identify decarbonisation strategies for buildings and infrastructure projects.

A particularly pressing issue for the construction industry is the ongoing skilled talent gap. Hong Kong’s construction sector is expected to face a labour shortage. Meanwhile Japan’s construction workforce has shrunk by 20% over the last decade according to its government’s labour force survey. As advanced technology is expected to transform the sector, companies may look to tap into alternative sources of talent from areas such as the tech industry, to bridge the talent gap and integrate digital solutions. In India last year, AtkinsRealis’ Global Technology Center invited 30 carbon experts from divisions in the Company across the world to train and develop next-generation future talents as part of its global Carbon Academy program.

Engineering evolving toward long-term resilience amid increased urbanization

Asia is urbanising at an unprecedented speed – more than 2 billion people already live in its cities, and this number is set to soar to 3.3 billion by 2050. With this rapid urbanisation, built environments and engineering methods are evolving, influenced by a strong new priority on long-term resilience and liveable urban spaces.

To meet this demand, modular and offsite construction methods are emerging as industry standards, delivering enhanced efficiency, cost-effectiveness, and lower environmental footprint. In the Asia-Pacific region alone, the modular construction market was valued at USD 38.72 Billion in 2023, and is expected to reach USD 58.07 Billion by 2029, rising at a CAGR of 6.83%. More broadly, urban spaces are being reimagined as vibrant, mixed-use environments that seamlessly blend residential, commercial, and recreational functions, to cater to the needs of diverse and shifting demographics. This is already bearing fruit, with mixed-use developments in Singapore seeing stronger median unit price growth than purely residential developments.

Climate-friendly features are central to this evolution, especially if we are to reach key targets such as the International Energy Agency’s goal of 18% of buildings’ energy consumption coming from renewables by 2030. Construction firms are increasingly exploring innovative solutions, such as green infrastructure and renewable energy integration, to ensure new spaces are sustainable and future-ready.

Comprehensive approaches towards long-term sustainable development

New technologies and expectations are reshaping both the infrastructure we experience every day and the inner workings of construction and infrastructure, increasing the imperative to balance efficiency with adaptability and environmental responsibility. These trends are deeply interconnected, underscoring the need for collaboration across sectors and operations to efficiently meet evolving demands and address strategic gaps.

The built environment can play a pivotal role in shaping a more resilient and sustainable future in 2025, especially as the year begins to shape up as a critical inflection point in the decade of climate action. In the face of intensifying environmental challenges, the construction industry is adapting to meet new demands by embedding resilience and sustainability at the core of its operations.

This article was first published in Hong Kong Economic Times.