Krungsri Research (published on Feb 2021) sees the construction industry is expected to recover over the next 3 years, with total construction spending forecast to rise by 4.5-5.0% in 2021 and then by 5.0-5.5% in 2022-2023. A major driver will be public-sector spending on infrastructure megaprojects, especially in the Eastern Economic Corridor, where investment in government-backed projects will encourage crowding-in of private-sector investment (e.g., in industrial estates). Beyond this, the gradual recovery of the Thai economy will also support greater investment in residential accommodation and commercial properties. And, there will be new opportunities in neighboring countries as their governments continue to improve national infrastructure in response to continued economic growth and urbanization.
Why Southeast Asian (SEA)?
Robust growth in the region is expected to benefit the entire construction value chain in SEA-5 (Indonesia, the Philippines, Malaysia, Vietnam and Thailand, as shown in Figure 1), driven by a shared set of key factors that include robust economic growth; a rapidly expanding middle class, which is driving private expenditure; and increases in foreign investments. China’s Belt and Road Initiative, for example, has been making significant investments in this region.
Where does technology come in?
The COVID 19 pandemic has forced construction companies to adopt new and readily available technologies, and that adoption will continue in the short term and post-pandemic, according to McKinsey & Co.
In the long term, there will be increases in tech investments and the use of digitization, building modeling systems, off-site construction and sustainable building materials.
The pandemic has helped contractors to realize how efficient and fast online platforms can be, especially with the ongoing shortage of skilled labor and fewer workers being able to be on a jobsite at any given time.