Construction sector bullish on Asia, Middle East growth

WITH Asia Pacific becoming a catalyst of global recovery, the region is now a prospective destination for construction investments, according to a recent discussion of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI).

Asian Council on Construction and Contracting Chairman Cihan Candemir said the construction sector in Asia Pacific has a crucial role in the world economy, with its recent contribution of 11 percent to the global gross domestic product (GDP) in 2011 to 2012.

He presented a bullish picture of the construction sector in Asia and Middle East, during the contracting and construction session of the 27th CACCI convention held last week in the Radisson Blu Hotel, Cebu City.

Candemir mentioned that China accounted for 41 percent of the construction spending of the Asia Pacific in 2011 and India, for over 10 percent of the region’s construction market. Japan’s construction spending is expected to grow in the years to come due to earthquake and tsunami reconstruction work.

With Saudi Arabia being the largest construction market in the Middle East and with the expectation that Qatar will be the fastest rising construction market due to the FIFA World Cup 2022 preparations, Candemir said he expects that the construction sector in the Middle East will be triggered by infrastructure investments, particularly in the energy sector.

He encouraged continuing strategic collaborations among member-countries so as to catch up with the expanding construction market worldwide.

In the same session, Jose Mari Cañizares of Cañizares Architects described construction as an important medium of development.

With the bulk of the global construction industry contributions coming from the Asia Pacific, Cañizares said the world is now looking at this region for investment opportunities, especially in the Philippines, which is an emerging hub in Asia for both business and leisure.

Infrastructure affects all economic players and opens the gates to tourism and foreign investments. With the Philippines facing a challenge in developing the industry, Cañizares suggested fixing our transport and road systems.

A third bridge or underpass from downtown Cebu to Cordova, he said, will ease the traffic situation going to the Mactan-Cebu International Airport (MCIA).

Expanding our terminals and airports would be a good strategy to accommodate potential domestic and foreign investors, he added.

Referring to the current negotiations among corporations and firms to expand the MCIA terminal, Cañizares also pointed out that the suggestions to address infrastructure issues will be delivered efficiently by breaking political barriers through a strong team-up between public and private sectors.

According to the Philippine Constructors Association Inc., there is a bright outlook for the Philippine construction industry, if the domestic GDP is maintained within the government target of 5.5 to six percent. This being an election year is also seen as a factor.

Improved business confidence, mainly because of the current administration’s efforts to combat corruption, will also support growth in the economy and construction, leading to more investments.

Aside from government spending, the construction industry can also rely on other sectors and growth drivers such as tourism, business process outsourcing and mining, as well as overseas Filipino workers’ remittances and public-private partnerships for infrastructure.

Other sessions in the two-day CACCI conference focused on trade facilitation; sustainable energy, resource and food security; the impact of Euro debt crisis on Asian businesses; the role of women entrepreneurs and youth in development; and trade, investment and tourism opportunities in the Philippines.