Construction industry of Japan

The construction industry of Japan is a large component of the Japanese economy in terms of economic output and employment. Its history is one that mirrors closely the overall economic path of the country, from establishment of the capital during the feudal era, through economic modernization and imperial rule, and until today with the recovery and great economic expansion of Japan's post war years. More recently, the industry has been influenced by preparations for major events, most notably the 2020 Summer Olympics, and a push towards sustainability. Contemporary challenges include maintaining access to labor and combating political corruption.

The first physical record of a construction industry in Japan is Horyuji, a Buddhist temple that was completed in 607 and is now the world's oldest wooden building. More comparable to a modern industry can be seen starting in Edo, now Tokyo, during the Edo Period. By the 17th century, Edo was the world's largest city, with a population of over one million. Edo carpenters benefited in particular from the Sankin kōtai system, which required daimyo, feudal lords, to spend alternating years in Edo. The extent of the development this spurred in Osaka, Edo and traveling stations was such that regulations on logging had to be established to ensure a sustainable supply of construction materials. Due to the frequency of large fires, rebuilding was an expected, and even celebrated as part of life in Edo. Japan's first building code was enacted in 1919 and additions in later years would include provisions to help prevent earthquake and wind damage.

In 1945, immediately after World War II, the construction industry suffered under United States Occupation of Japan despite the scale of rebuilding needed in devastated Japanese cities. Industrial infrastructure was relocated from inside Japan to former enemy territories such as China and the Philippines as war reparations. A number of infrastructure projects were also completed in anticipation of the event, including highways, the modernization of Haneda Airport, and the completion of the first route of the Shinkansen between Tokyo and Osaka.

In 2018, the Japanese construction industry contributed 28.4 trillion Yen to Japan's GDP. Factors in the short term growth in the industry around this time include preparations for the 2019 Rugby World Cup and the 2020 Summer Olympics, stimulus spending, and disaster relief projects. During this period, capital expenditure in the industry was growing while significantly exceeding the growth in spending in other industries. To counteract this, the industry has sought to invest in automation, such as robotics, and expand the labor pool by reaching out to younger workers or workers from overseas.

There are a number of interactions between the Japanese construction industry and its government that can be construed as corrupt. Observers note that companies have given political contributions or bribes to the government, particularly in the past when it was actively instituting protective measures or incentives to encourage industrial development. Very common especially in construction is dango (談合) or bid rigging to arbitrarily raise project costs, enriching contractors at the expense of taxpayers.