Message from Secretary General_November 2020
Posted on 16 December 2020
ASEAN-6 Q3 2020 Economy Results
Given the COVID19 pandemic’s severe impact on the global economies, we have been keeping a close eye on ASEAN-6 economic performance for some time.
Over the last couple of months, the ASEAN-6 countries have announced their GDP and other macro-economic results for Q3 2020.
Q2 2020 GDP figures have been rather horrible, reflecting the various lockdown measures put in place to contain COVID19, as shown in the table below. Vietnam remains the only country that registered a growth in Q2 and Q3 2020, compared to the other ASEAN-6 countries.
Table 1: ASEAN-6 GDP Q1-Q3 2020 (%)
Q3 2020 results were better as most of the “lockdowns” were lifted to some extent. Lifting of the restrictions was a necessary step to balance between keeping the economy running while controlling the pandemic.
The Construction Sector performed a lot worse in certain countries. During the implementation of the various lockdown measures, the construction industry was not shut down in Indonesia, Thailand and Vietnam (marked with “*” in the tables). As such, they were less impacted.
Thailand and Vietnam, having controlled the pandemic well, saw expansions in their construction sectors.
Notable in particular, is the case of Thailand, where the Government was able to re-prioritise and re-launch various projects to expand the construction sector. That resulted in a growth of 7.0% in Q2 2020 and 10.5% in Q3 2020.
Table 2: Construction Sector Q1-Q3 2020 (%)
The Indonesian construction sector slowed down as project funds were diverted to the healthcare sector. Q3 was better than Q2, but not by much.
The other ASEAN-6 countries, such as Singapore, Malaysia and Philippines shut down their construction sector and saw severe contraction during Q2 2020 (30 – 60% contraction).
Recovering from a shutdown has not been easy in Q3 2020, with all the restrictions encouraging social distancing and discouraging mass gatherings.
The Manufacturing Sector’s performance was a mixed bag. Again, the Vietnam manufacturing sector continued to grow, as with its other sectors.
Thailand’s & Indonesia’s manufacturing industry output contracted a little, while the it was more severe in the case for the Philippines.
Singapore’s manufacturing sector was riding high in Q1 2020 due to expansion in the electronics and precision engineering sectors. The partial lockdown in Q2 2020 shut down the manufacturing industry as a whole. But as the sector was opened up in Q3 2020, manufacturing activities expanded 10% due to the demand for electronics and pharmaceutical goods. The situation was similar for Malaysia, although the expansion was smaller.
Table 3: Manufacturing Q1-Q3 2020 (%)
By November 2020, most ASEAN-6 governments have announced their Forecast for 2020 and 2021. It is a given that 2020 will be a bad year for most countries with the exception of Vietnam, where the economy is expected to expand. The other ASEAN economies are expected to contract between 6.5% to 0.6%.
Indonesia’s economy is expected to contract a little, followed by Malaysia and Philippines. Largest economic contraction is expected for Thailand and Singapore.
Table 4: GDP Forecast for 2020 & 2021 (%)
2021 will see a rebound in economic activities in all ASEAN-6 countries. But again, it all depends on the containment of the pandemic and global recovery.
These results and more were presented at the 2020 SEAISI e-Forum on Sustainable Construction Sector, which is currently underway this week.
We will publish more excerpts of our presentations in the coming newsletters.
Keep Your Distance. Wear A Mask. Stay Safe.
YEOH WEE JIN