Asia Pacific To Witness Infrastructure And Construction Boom - ConsTrack360

Asia Pacific is set to witness infrastructure and construction boom in the coming five years with healthy spread of projects shared between residential, industrial and infrastructural categories.

Government intervention in the region along with increasing urbanization, investment and government and consumer spending is pushing the economies to post strong growth. Even though infrastructure investment has been a key driver of construction industry, the growth comes with challenges.

Current Trends and Drivers:

The outlook of construction industry in the region is strong with visible infrastructure spending in India, Indonesia, China, Australia, Singapore, Philippines, Thailand, Myanmar and Vietnam.

Rolling out its 2016-2020 infrastructure plan, Thailand is set to benefit from the stability of the current government along with public and private sector. The country is likely to witness increase in its infrastructure spending over the medium term.
Myanmar is experiencing lack of skilled labour that performs large infrastructure work. However, it is opening its market to foreign investors. The industry is likely to witness robust growth over the forecast period.
Vietnam plans to increase urbanization from its current 27% to a 45.2% by 2020 with increased spending on infrastructure projects through foreign and private investment. The country is taking help from public-private partnerships to maintain its manufacturing hub status in the region.
Indonesia is likely to spend heavily in infrastructure till 2025. The spend matches the government spend of nearly 7% per year, and many infrastructure-related firms in the country are said to have received capital from the government. This trend comes with the Indonesian jurisdiction protecting local suppliers, especially because it comes under earthquake affected zone, and where local survival is important.
Malaysia's construction industry has been impacted due to corruption charges. However, long term growth story remains intact.
In Philippines, government initiatives offer potential opportunity for contractors in booming markets. The country has witnessed strong growth in recent years.
Japan's construction industry is witnessing a slow growth in the forecast period owing to the slow investment growth in infrastructure, institutional, and housing projects.
China's geographical proximity with ASEAN nations is also helping China strongly expand its overseas infrastructure financing with the establishment of the Asian Infrastructure Investment Bank, which is likely to support ASEAN projects. This step has come in after the momentum of China-ASEAN cooperation that includes ASEAN Master Plan for Connectivity (AMPC) and China's "One Belt, One Road" (OBOR) initiative.
Australia also is significantly increasing its infrastructure spending and witnessing strong growth in residential and commercial developments.
The continent also is offering potential opportunity for contractors in booming markets, while protecting its local suppliers.

Key Issues:

ASEAN region consists of 10 independent jurisdictions including Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Laos, Thailand and Vietnam; and together they form the seventh largest trading block in the world.

Each of these has different and diverse cultural, political, economic and legal landscapes; however, one constant subject amongst them is the incessant need and appetite for investment in infrastructure and housing sectors.

This leads to difficulty in interpretation and enforceability of contracts, especially in cases where the state desires to procure state-of-the-art infrastructure and there is a lack of adequate funding. It also leads to differences in project participants about the project delivery.

Other issues that could negatively impact the progress includes land acquisition challenges and potential change in politics, which can bring about uncertainty, delays and potential termination of projects, thus increasing the chances of claims and disputes.

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This release was published on openPR.