Posted on 19 Jul 2024
Construction sector is the largest steel consuming sector in ASEAN-6 countries. From the discussion among SEAISI’s Statistical & Economic Committee, over 60% of total steel demand in the region is to serve this sector.
The construction sector of the ASEAN-6 countries is expected to continue to grow as the government of each country continues boost up its economy with many infrastructure projects, especially city expansion and transport connectivity.
Indonesia’s construction sector grew by 4.9% in 2023, mainly was driven by the increase in government capital expenditure and development activities. In 2024, it is expected that the sector will continue to expand with 5.8% higher in government’s allocation of budget for infrastructure projects, compared to last year. This is considered the highest budget in the last five years. Most of the projects relate to Nusantara capital city, regional road constructions and other infrastructure for the new city.
Malaysia’s construction sector was mainly driven by government’s projects. The government will rollout big -ticket infrastructure contracts that were largely missing in 2023 in Malaysia going into 2024. Estimated growth 6.8% in 2024, compared to the growth of 6.3% in 2023, supported by higher development expenditure allocation, and the increase in civil engineering projects (14.6% growth in Q3 2023 and 16.8% growth in Q4 2023).
Apart from infrastructure projects, foreign direct investment under Malaysia’s New Industrial Master Plan 2030 will offer higher value industrial building type of construction works.
Construction sector in Philippines expanded 5.6% in 2023, slightly below the country’s forecast of 6-7% for the year. It is expected that the expansion will remain around 7% in 2024. This is mainly supported by the government’s focus on the development of the infrastructure, transport and energy sectors.
Build Better and More projects will continue to take place as promised by the government. With more than 70 on-going projects, 30 projects have been approved and 95% of these projects are under project preparation. All in all, infrastructure spending in 2024 is expected to take place at 5.2% of total GDP, compared to 5.3% in 2023.
Singapore’s construction demand grew by 13.5% in 2023. This was due largely to the backlog of projects influenced by lockdown during Covid and departure of skilled workers. 58% of the projects are public projects. Construction realization is expected to be strong in 2024 due to the large amount of backlog remaining.
Thailand’s construction sector in 2023 contracted 0.7%, which is actually an improvement from -2.2% in 2021. Thailand’s construction sector is mainly driven by projects from private sector, which increased 2.9% in 2023 and is expected to expand 3% in 2024. Meanwhile, private construction decreased 2.3% in 2023 and is expected to rise 2% in 2024. The government is still working on finalizing its budget allocation and the details will be clearer in the second half of the year. For this, the forecast for the construction sector should be revised upward.
Vietnam’s government has well driven its economy with infrastructure projects, especially the investment on transport infrastructure. Construction increased 7.7% in 3 quarters of 2023 and total year the sector increased 7.1%.
It is expected that annual average growth of 7% between 2024 and 2027. Several projects were completed in the second half of 2023, with many more plans to finish over the next 2-3 years. As the government focuses on increasing the investment in transport infrastructure, major transport infrastructure projects completed in 2023 and is expected to be a major driver for GDP Growth of 6-6.5% that the government targets in 2024.
On the other hand, with the situation of funding crisis in the country, developers stalled more than a thousand projects in the country in 2023. The Vietnamese Real Estate Association revealed that the government has frozen resources, leading to a funding crunch for developers. There is no evidence for this critical situation to end yet.
Find out more on ASEAN and Vietnam at ‘Vietnam Focus Session’ and ‘Country Report Session’. Only at 2024 SEAISI Conference & Exhibition during 13-16 May 2024 in Da Nang, Vietnam. For more information visit https://www.seaisi.org/event/31#event
Source:SEAISI
