A survey by Japan Consultant Group reveals a gap between law and practice in the construction industry: despite the revised Construction Industry Act, only 34% of companies successfully modify contracts during material price hikes, and 24% still experience below-cost contracts.
The revised Construction Industry Act, which went into full effect after revisions in December 2025, includes provisions that will significantly shift business practices in the construction industry, such as prohibiting unreasonably low labor costs and below-cost contracts, strengthening countermeasures against construction period dumping, and clarifying contract modification rules during material price spikes. On the other hand, as institutional development progresses, there are many pointing out that there is variation in response in on-site practices.
To grasp this current situation, the Japan Consultant Group Co., Ltd. Construction Industry Research Institute (Shinjuku-ku, Tokyo) conducted a questionnaire survey targeting construction companies nationwide regarding their "Status of Compliance with the Revised Construction Industry Act."
Survey Overview
Survey Name: Questionnaire survey on the status of compliance with the revised Construction Industry Act
Target: 1,300 construction companies nationwide (random sampling)
Number of Responses: 95 companies (Response rate: 7.3%)
Survey Period: February 9, 2026 - March 6, 2026
Survey Method: Mail (Collection: Mail, FAX, Email, Web)
Survey Result 1: Only 34% "always secure contract modifications" during material price spikes
Under the revised Construction Industry Act, it is required to specify the "method of modification" for contract amounts, etc., during material price spikes in the contract, and to negotiate in good faith regarding price changes.
However, when material prices soared, only 34% of companies responded that they "always negotiate contract modifications with the client and sign a modified contract reflecting the amount."
On the other hand,
"Able to modify about half the time": 30%
"Carrying out construction almost at the original amount": 27%
This revealed the reality that a gap still exists between the law and actual practice.
Survey Result 2: Below-cost contracts "sometimes occurred" at 24%
-- Practices that were customary will become legal violation risks in the future
Regarding below-cost contracts, the legal enforcement...
FACT BOX
- Source: PR TIMES
- Category: Survey
FAQ
What percentage of construction companies always secure contract modifications during material price spikes according to the Japan Consultant Group Co., Ltd. Construction Industry Research Institute survey in 2026?
According to the Japan Consultant Group Co., Ltd. Construction Industry Research Institute survey conducted from February 9, 2026, to March 6, 2026, only 34% of the 95 responding construction companies always negotiate contract modifications and sign modified contracts reflecting the amount during material price spikes.
When did the revised Construction Industry Act go into full effect, and what key provisions does it include?
The revised Construction Industry Act went into full effect after revisions in December 2025 and includes provisions prohibiting unreasonably low labor costs, below-cost contracts, strengthening countermeasures against construction period dumping, and clarifying contract modification rules during material price spikes.
How many construction companies were surveyed by the Japan Consultant Group Co., Ltd. Construction Industry Research Institute, and what was the response rate?
The Japan Consultant Group Co., Ltd. Construction Industry Research Institute surveyed 1,300 construction companies nationwide using random sampling and received 95 responses, resulting in a response rate of 7.3% during the survey period from February 9, 2026, to March 6, 2026.
What survey method did the Japan Consultant Group Co., Ltd. Construction Industry Research Institute use to collect responses from construction companies in early 2026?
The Japan Consultant Group Co., Ltd. Construction Industry Research Institute used a mail-based survey method from February 9, 2026, to March 6, 2026, collecting responses via mail, FAX, email, and web submissions from 95 construction companies nationwide.
What requirement does the revised Construction Industry Act impose on contracts regarding material price spikes, and how are companies responding in practice?
The revised Construction Industry Act requires contracts to specify the method of modification for contract amounts during material price spikes and mandates good-faith negotiations on price changes, yet only 34% of surveyed companies reported always securing modified contracts, while 30% reported doing so about half the time.