Pandemic shakes Cambodia’s construction sector

Residential housing construction in Phnom Penh

Economic disruption by the Covid-19 pandemic is taking a toll on Cambodia’s construction industry which has had done very well before the virus outbreak on the back of strong investment inflows in the country’s property sector.

But last year, Investment in new construction projects was down 32.1 per cent to $7.8 billion, according to the National Bank of Cambodia’s latest Financial Stability Review 2020 released on May 31. Area covered by those projects was down 26.9 per cent to 17 million square meters, the review showed.

The residential, commercial and industrial segments made up the largest share of new projects, accounting for 46.1 per cent, 31.8 per cent and 14.6 per cent, respectively, the central bank said, adding that foreign direct investment inflows to construction and real estate fell by 10.6 per cent.

The number of new construction projects grew by one per cent last year to 4,841 projects, a far cry from the growth rate of 45.5 per cent in 2019 over the previous year.

Closed borders responsible for weaker investments

Industry representatives say that the main reason for the dropping investment was the restrictions imposed on cross-border travel amid the Covid-19 crisis, both in terms of potential foreign investors visiting projects the country and in terms of projects involving foreign developers and contractors, who could not enter.

According to real estate firm CBRE’s Cambodia branch, investment in construction would drop even further in 2021 amid a slow progress in the fight against Covid-19 and fewer government infrastructure construction projects, while the number of construction sites for condominiums and gated communities were also on the decline.

According to the central bank’s review, imports of construction materials and equipment also showed notable declines by 48.3 per cent and 43.3 per cent, respectively, for cement and steel imports.

The industry is now hoping for a rebound as cross-border travel is expected to become easier in the coming months amid global vaccination drives.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

Residential housing construction in Phnom Penh Economic disruption by the Covid-19 pandemic is taking a toll on Cambodia’s construction industry which has had done very well before the virus outbreak on the back of strong investment inflows in the country’s property sector. But last year, Investment in new construction projects was down 32.1 per cent to $7.8 billion, according to the National Bank of Cambodia’s latest Financial Stability Review 2020 released on May 31. Area covered by those projects was down 26.9 per cent to 17 million square meters, the review showed. The residential, commercial and industrial segments made up...

Residential housing construction in Phnom Penh

Economic disruption by the Covid-19 pandemic is taking a toll on Cambodia’s construction industry which has had done very well before the virus outbreak on the back of strong investment inflows in the country’s property sector.

But last year, Investment in new construction projects was down 32.1 per cent to $7.8 billion, according to the National Bank of Cambodia’s latest Financial Stability Review 2020 released on May 31. Area covered by those projects was down 26.9 per cent to 17 million square meters, the review showed.

The residential, commercial and industrial segments made up the largest share of new projects, accounting for 46.1 per cent, 31.8 per cent and 14.6 per cent, respectively, the central bank said, adding that foreign direct investment inflows to construction and real estate fell by 10.6 per cent.

The number of new construction projects grew by one per cent last year to 4,841 projects, a far cry from the growth rate of 45.5 per cent in 2019 over the previous year.

Closed borders responsible for weaker investments

Industry representatives say that the main reason for the dropping investment was the restrictions imposed on cross-border travel amid the Covid-19 crisis, both in terms of potential foreign investors visiting projects the country and in terms of projects involving foreign developers and contractors, who could not enter.

According to real estate firm CBRE’s Cambodia branch, investment in construction would drop even further in 2021 amid a slow progress in the fight against Covid-19 and fewer government infrastructure construction projects, while the number of construction sites for condominiums and gated communities were also on the decline.

According to the central bank’s review, imports of construction materials and equipment also showed notable declines by 48.3 per cent and 43.3 per cent, respectively, for cement and steel imports.

The industry is now hoping for a rebound as cross-border travel is expected to become easier in the coming months amid global vaccination drives.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

NO COMMENTS

Leave a Reply