Posted on 17 Mar 2021
2020 Macroeconomic Results
2020 has been a devastating year for the 6 largest ASEAN economies. Lockdowns have resulted in the manufacturing and construction industries coming to a complete halt in Malaysia, Philippines and Singapore. Other countries experienced construction activity slowdown due to diversion of funds to fight the COVID19.
The closure of borders brought the tourism related industries to a standstill. It has also stopped the return of migrant labour and foreign experts to countries that need them.
In spite of all the efforts, the pandemic remains hard to control as resurgence of COVID19 hit Indonesia, Malaysia, Myanmar, Philippines and Thailand. Singapore and Vietnam still encounter low number of daily infections, mostly from imported cases.
Elsewhere, the pandemic rages on relentlessly, through the winter season.
ASEAN-6 GDP in 2020
Vietnam is the only country that registered positive GDP growth (2.9%) in 2020, after having control the pandemic early and well. This is followed by Indonesia, with a slight contraction of 2.1% in GDP during 2020.
At the other end of the spectrum is Philippines with a contraction of 9.5% in 2020, mainly due to severe lockdown being imposed most of 2020.
Malaysia and Singapore 2020 GDP contracted 5.6% and 5.8%, respectively, mainly because of
partial lockdowns. For Thailand, a contraction of 6.1% in 2020 is mainly due to reduction in manufacturing and tourism related activities.
ASEAN-6 Construction Activities
Construction activities registered a remarkable 6.8% growth in Vietnam in 2020, due to early control over the pandemic.
Thailand is the other ASEAN-6 country in which construction grew 2% in 2020, in spite of a slight contraction in Q4, mainly due to the decline in private construction activities.
Indonesia’s construction activities contracted slightly at 3.3%. Indonesia, same as Vietnam and Thailand, did not shut down the construction sector in 2020.
Malaysia, Philippines and Singapore registered double-digit contraction in construction activities in 2020.
Q4 2020 construction sector performance appears better but challenges continue to plague the construction sector due to the need to adhere to new SOP, lack of foreign manpower, liquidity issues from delayed payments / cancelled projects being the among the main reasons.
ASEAN-6 Manufacturing Activities
Manufacturing activities in ASEAN-6 countries tell a different story altogether.
The Vietnam success story continues in the manufacturing sector, which grew 5.8% in 2020.
The other 2 ASEAN countries that achieved a growth in manufacturing activities in 2020 are Singapore (7.1%) and Malaysia (2.6%). Both countries’ manufacturing sector growth is due to electronics and medical goods (for Malaysia and Singapore) and for precision engineering goods (Singapore).
ASEAN-6 Government Forecasts for 2021
As borders remain largely closed, how are the ASEAN-6 economies expected to fare in 2021? Given the huge 2021 budgets committed by these Governments, here are the official forecasts:
With the vaccination programmes starting or about to start in most ASEAN countries, hopes abound for a recovery in 2021. Add the expected boost in public construction activities and the eventual opening of borders, 2021 will be a much, better year for most industries, including the steel industry.
Chinese / Lunar New Year Wishes
SEAISI wishes all our stakeholders a Happy, Healthy, Prosperous and Successful Lunar New Year 2021. Have a safe holiday!
Wear A Mask. Keep Your Distance. Stay Safe.
YEOH WEE JIN
Source:SEAISI
