The Thailand construction industry’s output value in real terms is expected to rise from $23.5 billion last year to $27.9 billion in 2023, measured at constant 2017 US dollar exchange rates, says GlobalData, a leading data and analytics company.

Thailand had gained the growth momentum last year, with output expanding by 2.7% in real terms after a slump of 2.8% in 2017, stated GlobalData in its report, ‘Construction in Thailand - Key Trends and Opportunities to 2023.’

The industry’s expansion will be driven by the government’s efforts to develop the country’s transport infrastructure, coupled with efforts to boost the residential construction market, it added.

Dhananjay Sharma, an analyst at GlobalData, said: “The growth of the industry during the forecast-period is expected to be supported by the government’s focus on the development of transport and energy infrastructure in the country. Under the Southern Economic Corridor (SEC) project, the government plans to invest Thai baht 106.8 billion ($3.4 billion) towards the development of 116 projects during the period of 2019–2022.

“The focus on the development of the energy sector is also expected to drive the industry growth. The government plans to add 56,431MW of new power capacity by 2037 under the updated power development plan (PDP 2018–2037). In addition, investments under the Eastern Economic Corridor (EEC) scheme to develop infrastructure in Chachoengsao, Chonburi and Rayong provinces are expected to support construction industry growth over the forecast period,” stated Sharma.

Residential construction was the largest market in the Thai construction industry between 2014 and 2018, accounting for 40.9% of its total value in 2018.

The market is expected to follow a similar trend over the forecast period, with residential construction accounting for 40.3% of the industry’s total value in 2023, stated the report.

Market output over the forecast period is expected to be supported by the ongoing urbanization and government efforts to balance housing demand and supply through the construction of low-cost housing units.

In the first half of 2019, the government announced plans to allocate THB4 billion to finance five low-cost housing projects in the country while in the 2020 budget, the government allocated THB650 billion towards capital expenditures.

Sharma pointed out that the total construction project pipeline in Thailand, as tracked by GlobalData including all mega projects with a value above $25 million, stands at THB11.5 trillion.

"The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 60.3% of the pipeline value being in projects in the pre-execution and execution stages as of October 2019," he added.-TradeArabia News Service