New Study: Thailand construction sector contracted by 8.3% in 2009

PRLog (Press Release) - Jan 02, 2010 -
We estimate that Thailand's construction sector contracted by 8.3% in 2009, on the back of a contraction of 4.7% in 2008. The rate of the sector's estimated decline in 2009 outstrips that for the economy as a whole, due to the highly cyclical nature of private sector construction activity. Fiscal constraints, meanwhile, limited the government's ability to partially offset the hole left by the shrinkage of private sector investment in the sector. Overall, we estimate a fall in capital investment of 8% in real terms in Thailand during 2009 (to US$64.5bn, from US$72.8bn in 2008). However, the outlook for 2010 is better. There are signs that the Thai economy is recovering, and we predict a resumption of modest to moderate real GDP growth in 2010. That should feed through in to the construction sector, which we now foresee expanding by 2.3% in real terms during the year. This constitutes a revision to our earlier construction growth forecast for 2010 (we had previously predicted growth of 1.1% in 2010). Other factors should kick in fully during 2010, alongside an expected recovery of the country's economy as a whole. Infrastructure investment forms a vital component of the government's spending plans. In August 2009, the cabinet approved THB200bn (US$5.9bn) for investments in infrastructure in the country's provinces during 2010. This is a part of the 'Stronger Thai' programme, which is in turn part of the multi-billion-dollar infrastructure-geared stimulus plan. According to the cabinet's decision, the first tranche of the funds will be allocated to ministries, which will then pass on the funds to projects that are ready to be procured in irrigation, transport and healthcare in the provinces. This investment is part of the second stimulus plan announced by the government in March 2009. It is a three-year, THB1.43trn programme, focused primarily on infrastructure, which the government estimates could add about 1.3 percentage points to growth annually between 2010 and 2012. The lion's share (around 40%) of this spending is earmarked for transport infrastructure and mass rapid transit systems, followed by water/natural resources (16.7%) and energy/renewable energy (14.4%). China has reportedly expressed an interest in participating in some of these projects. The sector's growth outlook is modest beyond 2010. Post-2010, we anticipate that the government may have to reign in spending ambitions, given fiscal constraints.

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Report Table of Contents:

Executive Summary
- SWOT Analysis
- Thailand Infrastructure Industry SWOT
- Thailand Political SWOT
- Thailand Economic SWOT
- Thailand Business Environment SWOT
- Market Overview
- Thailand
- Global Overview
- Governments To The Rescue: The Global Surge In Infrastructure Spending
Table: Infrastructure Stimulus Plans List, Correct As Of July 2009
- Major Infrastructure Developments And Key Projects
- Transport Infrastructure Overview
- New And Ongoing Projects
- Airports
- Ports
- Road Networks
- Rail Networks
- Energy And Utilities Infrastructure Overview
- New And Ongoing Projects
- Power Plants And Transmission Grids
- Construction Overview
- New And Ongoing Construction
- Residential Construction - New Projects
- Commercial Construction
- Industrial Construction
- Tourism Construction
- Major Projects Table
Table: Thailand - Major Infrastructure Projects
- Industry Forecast Scenario
Table: Economic And Construction Data
- Risks
- Business Environment
- Asia Pacific Infrastructure Business Environment Ratings
Table: Regional Infrastructure Business Environment Ratings
- Limits Of Potential Returns
- Risks To Realisation Of Returns
- Project Finance Ratings: Outlook For Asia Pacific
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating
- Foreign Direct Investment
- Labour Force
- Legal Framework
- Tax Regime
- Macroeconomic Outlook
Table: Thailand - Economic Activity
- Political Outlook
- Company Monitor
- CH Karnchang
- Siam Cement
- Italian-Thai Development Public Company
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