11/20/2009 [ tribune.net.ph ]
Public projects will lead local construction output over the next five years as the private sector takes the back seat, according to industry forecasts done by London-based experts.
“We expect construction output in the Philippines to become more dependent on government-financed infrastructure work, but the growth rate in this sector will be limited by the country’s comparatively sizeable fiscal deficit,” according to the Global Construction 2020 report issued last Nov. 12 by consulting firms Global Construction Perspectives and Oxford Economics.
It forecasts the country’s construction output to grow at an average of almost six percent over the next five years due to a slowdown in the private sector.
Between 2014 and 2020, the compound annual growth rate (CAGR) will be at five percent, the report said.
The volume of construction output in the country grew at an average rate of 11 percent between 2005 and 2009, according to their data.
Global Construction 2020 provided 10-year industry growth forecasts. It is financed by four construction conglomerates: Cemex, Holcim, Lafarge and Orascom Construction Industries.
The highlight of the report was emerging markets in the Asia Pacific region would start to dominate the world market over the next 10 years, with stellar growth projected at 125 percent.
China is at the center of this shift, as it is poised to overtake the United States as the world’s largest construction market by 2018, the consulting firms said in a statement.
By 2020, China, India and South Korea would be among the top 10 construction markets in the world, with India replacing Japan as Top 3, they said.
Aside from the US, the world’s largest markets in this industry include Germany, Spain, the UK and France.
Indonesia, Vietnam and Thailand would also experience impressive growth rates over the next decade, they added.
“All of the data points to both short and long-term growth in emerging markets. We predict that in just ten years’ time, construction in these markets will more than double in size, growing by an estimated 110 percent and representing 17.2 percent of GDP in 2020,” the statement said.
Aside from the Asia Pacific markets, these emerging markets include Nigeria, Turkey, Poland, Morocco and Egypt.
But the global construction market will not fully recover until 2011.
“The downturn in the global construction industry during the period 2007 to 2009 has been of epic proportions. In developed countries, this has caused a slump in annual construction output of over 650 billion dollars,” the statement said.
North America and Western Europe is bearing the brunt of this slump.
By next year, the US market should recover due to residential construction. Among developed countries, it will exhibit the strongest growth between 2011 and 2013, according to the statement.
“The report predicts that today’s global construction market is worth an estimated 7.5 trillion dollars, representing 13.4 percent of global GDP. But by 2020, construction will be a 12.7 trillion dollar global market, an overall growth of 70 percent in the next decade. Construction in 2020 will account for 14.6 percent of global GDP,” it added.
____________________________________________________________________________________
