June 2026 Construction Indices

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M

Update

July 31, 2026 12:35 PM GMT

Construction | Japan

Morgan Stanley MUFG Securities Co., Ltd.+

Ryo Yagi

Equity Analyst

June 2026 Construction Indices

MLIT June 2026 stats announced on July 31 show 1) nonresidential unit price (12mo avg.) up for a 44th straight month,

and 2) the unit cost balance up YoY for a 40th straight month,

with the pace of growth continuing to accelerate.

Construction

Japan

Industry View

Attractive

Key Takeaways

Construction orders (top 50 contractors basis) increased 2.3% YoY, with building

construction down 10.5% YoY, civil engineering up 32.5% YoY. Building

construction returned to negative growth for the first time in 2 months, civil

engineering returned to positive growth for the first time in 3 months.

Construction starts floor area: residential +19.1% YoY, non-residential +4.1%.

Residential up for 3rd straight month, non-residential up for first time in 5

months.

Non-residential unit price (12mo avg): +11.8% YoY, positive growth for 44th

month in a row, supported by strong June monthly unit prices, up 21.8% YoY.

Unit cost balance: positive YoY for 40th month in a row, pace of growth

accelerating. May 2026 deflator (non-residential): 124.9 (+4.1% YoY).

Non-residential unit prices: June monthly unit prices increased 21.8% YoY, following

similarly strong growth of 19.4% YoY in May. This contributed to improving

momentum in non-residential unit prices on a 12-mo rolling average basis. As

projects secured at improved profitability increasingly move into the construction

phase, we expect the upward trend in unit prices to continue.

Building construction orders: Although June orders declined YoY, we believe this

primarily reflected the timing of project bookings. Based on earnings

announcements already released by general contractors and subcontractors, we

continue to see evidence of solid demand and do not see cause for concern

regarding the demand outlook.

June construction skilled worker shortage: Nationwide average (6 job categories)

0.4% (seasonally adjusted, same hereafter), decreasing by 0.9ppt MoM (May: 1.3%).

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