SE Asia’s construction spending expected to decline further

KUALA LUMPUR: Construction spending in Southeast Asia and Hong Kong is expected to drop further, says BCI Asia in its latest quarterly Construction Starts Report.

Latest data from the construction information research firm revealed a 31% drop in the value of construction starts from the second to the third quarter of 2009.

“The value of construction starts in the year to Sept 30 may be up 4% to US$124 billion from US$119 billion a year earlier, but the 3Q2009 result of US$21.9 billion is a staggering 41% dip from a quarterly peak of US$37.1 billion in the 4Q2008,” it said in its report.

BCI Asia added that as at September 2009, the value of government construction projects in the region was up 37% compared with the same nine-month period a year earlier, compensating for the 9% decline in private sector construction starts in the same period.

“The value of infrastructure starts are up 42%, utilities up 24%, education/research up 38%, office up 1%, health up 81% while community/legal starts are up 22% reflecting high levels of government activity over the year,” it said.

On the other hand, the private sector saw industrial starts falling 27% on-year, while retail/exhibition starts showed a 25% decline. The value of residential starts fell a marginal 1%, whereas hotel starts showed the most significant decline at 32% on-year. 

Meanwhile, transport projects showed a 31% decline year-on-year while oil, gas and mining projects showed a smaller 3% decline for the same period. However, the oil, gas and mining sector showed a 108% increase in starts from the previous quarter.  

The Construction Starts Report describes the value of projects starting construction in quarterly periods for the last three years as reported by BCI Asia in Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.   The report’s data is sourced from approximately 50,000 reports by BCI Asia on significant building and construction projects.