Construction Sector in ASEAN-6 to Recover in 2021
The South East Asia Iron and Steel Institute in a recent report said that “The ASEAN economy was badly hit in 2020 due to the COVID-19 outbreak. The
The South East Asia Iron and Steel Institute in a recent report said that “The ASEAN economy was badly hit in 2020 due to the COVID-19 outbreak. The construction sector in some countries has been shut down in line with the imposed lockdowns such as Philippines, Singapore and Thailand. Some have to delay their construction projects as they needed to divert funds into the healthcare sector, to contain the pandemic. However, many sources forecasted that the construction industry in ASEAN should recover in 2021 since it is the main sector that the Government in each country uses to boost the economy. Most of the ASEAN-6 economies are working on accelerating public infrastructure projects to get their economies back on recovery. However, challenges remain as Governments continue to battle the resurgence of COVID-19 as they open up their economies. There are hopes that vaccination will help protect the people and that will allow the economies to open without fear of more outbreaks. The construction sector is expected to improve in 2021, but growth is going to be uneven across the region.”
Indonesia’s construction sector was moderately hit by the COVID-19 outbreak. The growth rate remained positive, from the earlier predicted growth of 5.72% to 0.2% in 2020. It is expected that the construction growth rate will increase by 5.1% YoY in 2021.
In 2020, the Malaysian construction sector was the sector that contracted most, at 18.7% when compared to other sectors due to the pandemic. However, the Ministry of Finance announced that it is expected that construction sector will grow the most, at around 13.9% in 2021, with many infrastructure projects planned as indicated in the Malaysia 2021 Budget.
The Philippines construction industry declined significantly by 9.2% in 2020 due to one of ASEAN’s more severe lockdown to contain the pandemic. However, it is expected that the construction industry in the country will bounce back with a growth rate of 8.3% from 2021 till 2024.
In Singapore, the construction sector has been hardest-hit industry due to the pandemic, and it is expected to contract 33.7% for the full year of 2020. This comes after a 61% year-on-year contraction in Q2 2020, a 46.2% contraction in Q3 2020 and a 28.5% contraction in Q4 2020. The improvement in Q4 came with the resumption of construction activities after COVID-19 pandemic came under control.
Thailand’s overall macroeconomic indicators showed recovery signs in the construction sector in the third quarter of 2020 (+10.5% y-o-y growth) compared to the second quarter of the same year (+7.4% y-o-y growth). The recovery of the first pandemic in the country has a great impact on construction sector, which found accelerated year on year, while other economic sectors found negative growth but at a slower pace than the preceding quarter.
Vietnam’s economy grew 2.9% in 2020, and this is one of the fastest growing economies in the world during the COVID-19 pandemic. Among the main drivers behind the positive growth rate is public investment, with a range of public-funded infrastructure projects playing a major role in boosting demand, supporting enterprise development, and creating jobs.