CEBU, Philippines - The Philippine Constructors Association in the Philippines Inc., (PCA) anticipates a promising 2013, while last year ended at a high note for the construction sector and the Philippine economy as a whole.
In its latest outlook report, PCA is looking at a bright future for the construction sector both at home and abroad.
“The fearless forecast for 2013 showed a faster acceleration in growth by as much as eight percent, couple with sustained low inflation rate [stabilize at three percent] and interest rates [91-day T-billion and 10-year T-bond at two percent and 4.5 percent respectively]. This assumes that the peso will not appreciate further to below P40 per dollar, otherwise this will just dampen the positive-growth potential,†the PCA report indicated.
The staggering increase in public construction investments in 2012 - reinforced by conducive macroeconomic conditions, government’s ability to further boost infrastructure expenditures, the growing electricity demand, and the 2013 mid-term elections-related spending will provide a blistering momentum to the Construction Sector in 2013.
The increased growth of the private sector in real estate development supported by low interest rates will likewise contribute to the sector’s expansion.
Improved business confidence mainly because of efforts of current Administration to combat corruption will also support growth in the economy and the construction as this leads to more investments.
According to the latest Social Weather Station survey in 4Q 2012, the President’s satisfaction is rated “very good†with a net score of +55.
Aside from these positive factors, the Construction Sector can ride on the rise in the following economic growth drivers: a) emerging industries such as tourism and business process outsourcing (BPO); b) OFW remittances; and c) public-private partnership (PPP) program of the current administration (updates on these growth drivers are presented in the table below).
Increasing activities in these growth drivers would result to more civil construction works such as office buildings, roads and bridges, facilities for utilities, and the like.
In the international scene, the sector also faces a host of opportunities. Because of the slow recovery of US economy and the debt crisis in Europe, Asia has now become a catalyst of global recovery, providing a prospective destination for construction activities. The world is now looking at this region, especially in the Philippines, which is an emerging hub in Asia for both business and leisure.
The need to enhance the capacity and quality of Philippine infrastructure (e.g. expansion of our existing airports, seaports, and highway systems) would mean higher demand for construction services.
Meanwhile, Filipino construction companies may also find opportunities in Middle East, particularly Saudi Arabia (being the largest construction market in the region) and Qatar (due to the 2022 FIFA World Cup preparations).
The total output construction sector increased remarkably in 2012, posting a double-digit growth of 14.4 percent from 2011, which is more than its average annual growth in the last several years.
It is important to note that the sector surged to a high of 18.4 percent during the last quarter of 2012, coming from 8.1 percent registered in the previous year. This allowed the construction sector to contribute a total of P345 billion to the economy in 2012 (from Php 302 billion in 2011), and increased its share to GDP from 5.1 percent in 2011 to 5.5 percent in 2012.
According to the PCA report, this phenomenal growth was mainly caused by the upsurge in government spending on infrastructure, and sustained growth in private construction. /JOB (FREEMAN)