How do local governments perceive current construction costs?

Of the 155 organizations that responded, 154 (almost all) stated that costs are soaring, recognizing it as an extremely serious issue.

What is the situation regarding unsuccessful bids (bid failures)?

Approximately 90% of local governments have experienced unsuccessful bids in the past three years for the maintenance and repair of public facilities.

What is the main reason for unsuccessful bids?

Over 70% of the reasons cited are that the estimated price is too low to match the actual costs, indicating a significant gap between the budget and market prices.

What measures are local governments considering in response to rising construction costs?

About 70% of local governments are considering or implementing measures such as reducing the scale of facilities or revising project timelines.

What recommendations has the Japan Research Institute made?

The Japan Research Institute recommends realistic planning based on sustained high construction costs, consolidation of facilities, and the utilization of PFI (public-private partnerships) to fundamentally review public facility management.

Survey on Public Facility Development Amid Rising Construction Costs: JRI Urges Fundamental Review

Published May 19, 2026 11:00 PM ・ Updated Jun 14, 2026 4:58 PM ・ 4 min read ・ Source: PR TIMES

The Japan Research Institute, Limited (JRI) surveyed municipalities on the impact of soaring construction costs. Results reveal that approx. 90% have experienced 'failed bids,' highlighting a severe gap between budgets and market prices. JRI recommends planning based on sustained high costs and expanded use of PPP/PFI.

The Japan Research Institute, Limited (Headquarters: Shinagawa-ku, Tokyo; President and CEO: Jun Uchikawa) conducted a survey among 557 basic municipalities in Japan with populations over 50,000 (excluding special wards) regarding 'Public Facility Development in an Era of Soaring Construction Costs' from January 30 to February 20, 2026. The survey aimed to understand the impact of rapid construction cost increases on municipal infrastructure maintenance and to recommend sustainable development strategies.

According to the findings, 154 out of 155 responding organizations recognized that 'construction costs are soaring,' with approximately 80% feeling the impact strongly within the last five years. The impact on bidding processes is particularly severe: about 90% of municipalities experienced 'failed bids' (no successful bidder) for public facility development or repairs over the past three years. The most common reason cited (by over 70%) was that 'the estimated price was too low to match market rates,' highlighting a disconnect between municipal budgeting and market reality.

In response, about 70% of municipalities are considering or implementing downsizing or postponement of projects, affecting the delivery of public services. Based on these results, JRI recommends a fundamental shift in public facility management. This includes creating realistic plans predicated on costs remaining high, reducing total floor area through facility consolidation, setting appropriate estimated prices through public-private dialogue, and accelerating the use of private sector expertise such as PFI.

[Survey Overview] - Target: 557 basic municipalities in Japan with population > 50,000 (excl. special wards) - Respondents: 155 (Response rate: 27.8%) - Period: January 30 – February 20, 2026

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Source: PR TIMES
Category: Survey

Survey on Public Facility Development Amid Rising Construction Costs: JRI Urges Fundamental Review

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