According to a new report by Timetric’s Construction Intelligence Centre (CIC), Thailand’s construction industry is picking up with a more optimistic future outlook, after suffering a decline during the economic crisis.
In real terms, the industry’s output value recorded a compound annual growth rate (CAGR) of -0.23% during the review period (2010–2014). This decline was mainly due to socio-political unease, which affected the country’s economic growth and foreign investments. The outlook, however, seems more positive, driven by the stabilising political and economic conditions along with new investments in residential, infrastructure and commercial construction projects, and improvements in investor confidence in the country.
Thailand’s construction industry is expected to increase in value from US$17.4 billion in 2014 to US$19.9 billion in 2019 in real terms, at a CAGR of 2.79%. The economic expansion, the country’s housing demand and the government investment in public infrastructure are projected to be the main drivers of growth. Moreover, the government’s tax incentives aimed to attract investment from foreign companies in agriculture, renewable and alternative energies, information technologies as well as the tourism, sector should boost the construction activities in the coming years.
However, risks associated with the industry’s positive outlook are still in place. Economic and structural factors coupled with an absence of modern transport infrastructure and a lack of skilled labour will likely to slow the potential industry growth.
According to the report, residential construction was the largest market in the Thai construction industry during the review period, accounting for 37% of the industry’s total value in 2014. According to Timetric’s CIC, the country’s rising population, urbanisation and positive developments in regional economic conditions will support the market over the forecast period.
Infrastructure construction was the second-largest market, accounting for around 24.6% of the industry’s total value in 2014. The market is projected to grow further supported by the government’s eight-year national development plan that aims to develop Thailand’s infrastructure by 2022. To implement this programme, the government has allocated THB2.4 trillion (US$75.0 billion) to invest in road, rail and port infrastructure.