LONDON--(BUSINESS WIRE)--The construction market in Thailand is expected to grow at a CAGR of almost 8% during the period 2018-2022, according to a new market research study by Technavio.
The report categorizes the construction market in Thailand by end-user that includes public construction and private construction. Technavio researches estimated that nearly 60% of the market share came from public constructions in 2017 and this segment is expected to grow at a much faster pace compared to the private construction segment in the next four years.
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Market driver: rising investment in public infrastructure projects
The Thai government has been investing majorly in public infrastructure development projects in the recent years. This is expected to remain one of the major factors driving growth in the country’s construction market. In 2017, the government allocated USD 25.71 billion into new public projects such as railways, public roads and highways, airports, and shipping ports. The plans to invest in infrastructure projects correspond with the economic recovery in the ASEAN (Association of South East Asian Nations) region, boosted by the improving global economic order.
Most of the public infrastructure investments made in the country during the last three decades focused towards power and telecom projects, but the new military government that came to power in 2014 is shifting focus towards transportation. The country is further expected to invest around 4.42% of its annual GDP, as estimated in 2017, in transports infrastructure over the next ten years.
According to a senior analyst at Technavio for construction research, “During 2015, the government had announced the implementation of the Transport Infrastructure Development Master Plan 2015 to 2022 with the objective of enhancing regional connectivity and boosting competitive advantage. The government has allocated USD 55 billion for this development plan, and several projects are already in the construction phase. A total of 20 projects were approved in 2016 and a further 36 projects started implementation during 2017.”
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Market trend: growth in prefab constructions
Prefabricated construction includes the assembly of the components or units of a building structure that are manufactured in a controlled facility and then transported to the construction site. It refers to any building or structure whose sections have been manufactured under factory conditions and then assembled at the construction site to create the complete house, buildings or structure. Although prefabricated construction methods have been present in Thailand for the past two decades, they have only started gaining momentum during the past few years. Prefabricated constructions include both modular and panelized assemblies. The demand for these construction techniques has been growing in Thailand because of their various advantages over on-site constructions such as shorter construction durations and reduced labor.
Market challenge: construction labor and materials shortage
Thailand’s construction market is heavily dependent on foreign labor and material imports to run the industry. However, the country is currently facing challenges because of a shortage of manual labor and supply of construction materials that may hinder the future growth in the construction market. Several industries in Thailand, including the construction industry, employ many foreign laborers or migrant workers. Most of these workers are sourced from poorer South Asian countries such as Myanmar, Cambodia, and Laos. These workers are primarily brought into the country illegally and used as manual labor in the construction industry.
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Some of the companies in the construction market in Thailand:
- ITALIAN-THAI DEVELOPMENT
- CH. Karnchang
- TTCL Public Company
- Sino -Thai Engineering & Construction
- Unique Construction and Engineering
- STP&I
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