Global Construction Futures

Growth in global construction will be underpinned by China, the US and India which combined will add almost US$2.4 trillion to global construction work done over the next 15 years.

________

ASEAN Tigers—Fastest growing construction markets globally in Indonesia,

Philippines, and Vietnam, supported by strong fundamentals

________

The Philippines, Vietnam, Malaysia, and Indonesia will be the four fastest growing construction markets over the next 15 years. While the Philippines, Vietnam, and

Indonesia are supported by strong fundamentals, Malaysia’s construction growth will be driven by the rebound from the coronavirus pandemic.

The Philippines is set to be the fastest growing construction market over the next 15 years, averaging over 6% growth per annum. Economic growth will be supported by a strong demographic outlook, with the working age population growing by 1.5% per annum over the next decade. The government’s public-private partnership initiative and improved long-term investor confidence are set to support investment—and therefore

construction activity—over the forecast period. Civil infrastructure will be the fastest growing sector, with significant government support.

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Source: Oxford Economics

Construction materials price growth in Metro Manila eases in January

Price growth for construction materials in the National Capital Region slowed in January at both the retail and wholesale levels, driven by the stronger peso, the Philippine Statistics Authority (PSA) reported on Tuesday.

According to the PSA, growth in the construction materials retail price index eased to 5.5% year on year in January from 5.6% a month earlier. Year-earlier growth was 3%.

The January reading was the lowest since the 4.8% growth posted in March 2022.

“Construction materials retail price growth eased to 5.5% in January 2023 partly due to the stronger peso exchange rate. (The peso was at some of its strongest levels) in nearly eight months that somewhat reduced import prices of imported construction materials as well as the net downward correction in global commodity prices of construction materials in recent months amid the risk of recession in the US,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

The peso closed at P55.09 against the dollar Tuesday, weakening from Monday’s P54.95 finish.

Of the seven categories of commodity, five posted slower growth in January. Prices of electrical materials rose 3.1% year on year, against 3.3% in December. This was followed by masonry materials (3.6% from 4.4%); plumbing materials (4.4% from 5%); tinsmithry materials (7.1% from 7%); and miscellaneous construction materials (8.5% from 8.9%).

Growth in carpentry materials prices accelerated to 3.5% from 2.9% a month earlier, while growth in painting materials prices was unchanged at 5.2%.

In a separate report, wholesale price growth of construction materials in Metro Manila slowed to 9.4% in January from 10.3% a month earlier. A year earlier, price growth was 5.3%.

The January reading was the lowest since the 7% posted in August.

Of the 17 commodities, 13 posted weaker price growth, led by sand and gravel where price growth slowed to 5.7% from 8% in December. Also posting lower price growth were concrete products and cement (10.2% from 10.5%); hardware (7.1% from 7.6%); lumber (7.4% from 7.8%); G.I. sheets (14.5% from 17.1%); reinforcing and structural steel (11.4% from 12.3%); tileworks (5.1% from 5.9%); doors, jambs, and steel casements (5.7% from 6.4%); electrical works (7.9% from 8.1%); plumbing fixtures and accessories or waterworks (2.1% from 5.9%); painting works (11.7% from 12%); PVC pipes (1.8% from 2.7%); and fuels and lubricants (6.4% from 8.6%).

Mr. Ricafort forecasts an increase in building materials prices following the gradual economic reopening of China.

Source: Business World and PSA

CMWPI continued to pick up at a slower annual pace in December 2022

The year-on year increase of CMWPI in NCR slowed down further to 10.3 percent in December 2022. Higher annual growth rate was posted in November 2022 at 10.4 percent. Its annual increment in December 2021 was recorded at 5.2 percent.

The lower annual growth in CMWPI was primarily brought about by the downtrend in the heavily-weighted index of reinforcing and structural steel at 12.3 percent during the month, from 12.7 percent in November 2022.

Moreover, compared with their annual rates in the previous month, slower annual increments were posted in the indices of the following commodity groups in December 2022:

a. Hardware, 7.6 percent; b. Plywood, 5.8 percent; c. Plumbing fixtures and accessories/waterworks, 5.9 percent; and d. Fuels and lubricant, 8.6 percent.

Meanwhile, annual gains were higher in the indices of the following commodity groups:

a. Sand and gravel, 8.0 percent; b. Lumber, 7.8 percent; c. G.I. sheet, 17.1 percent; d. Electrical works, 8.1 percent; and e. Painting works, 12.0 percent.

The rest of the commodity groups either retained their respective November 2022 annual growth rates or had zero percent annual increment during the month.

The annual average rate of CMWPI for the year 2022 rose to 8.3 percent from 3.2 percent in 2021.

Compared with their annual average rates in 2021, the indices of 12 out of 17 commodity groups registered higher annual average rates in 2022. In addition, the plumbing fixtures and accessories/waterworks exhibited a positive annual average growth of 7.2 percent, from an annual average decline of -0.8 percent in 2021.

Source: PSA