Growth coming for Asian construction market

A new report produced by research specialist GlobalData predicts continued growth for Asia’s construction market. According to the report, construction in the ASEAN region will grow by over 6% annually over next five years. The report has been published to coincide with the INTERMAT ASEAN 2018 and Concrete Asia 2018 trade shows for construction, infrastructure and concrete sectors. The data suggests that construction output in the member states of the Association of South-East Asian Nations (ASEAN) would ex
September 4, 2018 Read time: 3 mins

A new report produced by research specialist GlobalData predicts continued growth for Asia’s construction market. According to the report, construction in the ASEAN region will grow by over 6% annually over next five years. The report has been published to coincide with the 242 INTERMAT ASEAN 2018 and Concrete Asia 2018 trade shows for construction, infrastructure and concrete sectors. The data suggests that construction output in the member states of the Association of South-East Asian Nations (ASEAN) would expand by over 6% yearly on average during 2018–2022.

Danny Richards, GlobalData’s Lead Economist for Construction Industry said, “The South-East Asia region continues to develop at a rapid pace, with economic growth projected to reach an annual average rate of 5.1% during 2018–2022, the fastest among all global regions, and an acceleration from the healthy rate of 4.8% recorded in the past five years. Much of this growth is being driven by investment in new infrastructure, while increasing domestic demand is driving the expansion in construction of buildings across the residential and non-residential sectors.

“Although there are disparities in the pace of growth in construction output among the ASEAN member states, the region’s construction industry as a whole will grow by 6.1% on an annual average basis in the next five years. This is marginally behind the projected growth of 6.5% in the thriving emerging markets in the Middle East and Africa, but the ASEAN region presents investors and developers with a lower level of risk of projects being put on hold or cancelled, according to GlobalData’s Construction Risk Index.

“Reforms to encourage Public Private Partnerships (PPPs) are almost universal across the ASEAN region. The Philippines, Myanmar, Laos and Vietnam have undergone reforms to create more accessible markets for private sector investment in construction through PPPs. Indonesia has undergone similar reforms, expanding the construction sectors eligible for PPPs and increasing incentives to invest. Land ownership is another area that is under reform. Once a notoriously difficult process, acquiring land in Indonesia is now much fairer and more transparent. Vietnam has also implemented an initiative in which foreign investors are allowed to acquire land and hold a majority stake in a commercial or residential project.

“According to GlobalData, the combined value of mega-projects (with a minimum value of US$25 millio) across ASEAN stands at $2.9 trillion. This includes all projects from the announcement stage to execution. An analysis of the pipeline by stage reveals that the region provides huge opportunities with respect to a large volume of early stage projects. Just under $1.5 trillion of projects are currently in the planning and pre-planning stages, suggesting significant construction spend is to occur for some time.”

Finance & Funding

For more information on companies in this article

Related Content

  • Rapid replacement of multiple bridges – the plan
    December 14, 2017
    The US State of Pennsylvania is saving itself $220 million over 10 years on a programme to replace 558 bridges with an unusual public private partnership approach - Kristina Smith writes It is called the Rapid Bridge Replacement Programme with good reason. Pennsylvania’s Department of Transport, PennDOT, wants to see no less than 558 structurally deficient bridges replaced with newly designed and constructed ones, all within four years. Using traditional forms of procurement this programme would be like
    Read More
  • Manufacturing body CECE issues positive results
    March 12, 2015
    The European construction equipment manufacturer’s association, CECE, has released its strongly positive Economic Report for 2014. According to this report, equipment sales in the European market grew by 9% in 2014. However a flat sales growth is forecast for 2015. The report says that 2014 was a troubled, yet good, year for the European construction equipment industry. Sales on the European market grew by 9% compared to 2013, highlighting slight growth in construction. The European construction equipment m
    Read More
  • Montreal’s new Champlain Bridge is in a race against time
    June 8, 2018
    Montreal’s US$3.24 billion Champlain Bridge across the St Lawrence River may not be open on time, according to a report by the independent Auditor General. The 3.4km cable-stayed bridge has two decks supporting three lanes of highway traffic in each direction. A third, central deck supports a mass transit system and a multi-use path. The new bridge will replace the nearby 50-year-old Champlain Bridge which has been deteriorating at an alarming rate. The government signed a contract in 2015 with a private
    Read More
  • Wacker Neuson bullish with strong results
    May 8, 2019
    The Wacker Neuson Group reports a strong financial performance for the first quarter of 2019. The firm’s results reveal a double-digit rise in revenue to €434.6 million, a gain of 17%. The company saw even higher growth of profit before interest and tax (EBIT) growth to reach €30.2 million, a jump of 31%. Meanwhile the firm’s EBIT margin improved to 6.9%, a gain of 0.7%. “This strong start to the year sees us continue the dynamic pace of growth from the fourth quarter of 2018. Demand for our products and
    Read More

Highlighted Content