Japan’s construction market is expected to reach US$941.3 billion by 2034. It will grow from US$652.7 billion in 2025 to US$679.8 billion in 2026, with a CAGR of 4.15%. The government is promoting the adoption of BIM and digital twins, while the use of AI and robots is advancing to address labor shortages.
Japan’s construction market reached US$652.7 billion in 2025 and is expected to expand to US$679.8 billion in 2026, with a CAGR of 4.15% forecast for the period from 2026 to 2034. The market is supported by government-led infrastructure investment and the wave of digitalization, while private investment in data centers and logistics facilities is also expected to accelerate.
Urban redevelopment and large-scale redevelopment projects are driving construction demand, with commercial and residential construction becoming more active, particularly in Tokyo. At the same time, labor shortages are becoming increasingly severe, and many companies are expected to withdraw from bidding for new projects. The adoption of AI, robotics and smart-site management technologies is advancing.
The government is promoting the adoption of BIM and digital twins to improve construction productivity, and the regulatory framework is scheduled to be developed further in 2026. Against the backdrop of the policies of the Ministry of Land, Infrastructure, Transport and Tourism, the adoption of AI-based design and site-management tools and the spread of prefabricated construction methods are accelerating.