Thursday 12 March 2015

Axis Capital Group Construction Updates

Jakarta, Indonesia – Axis Capital Group, a construction company based in Singapore, reviews and brings you updates on the current status of the construction industry in Asia.

China’s main interest in construction basically started when the government has searched for minerals in sub-Saharan Africa which requires building railways from mines and ports. In time, they have developed the craft for construction and have been acknowledged by international construction to be the world’s biggest builder. China’s construction is commended for finishing projects on time.

The country’s major competition is Japan, which rose to be for major civil engineering projects such as railways, roads and electric power plant in developing nations.

Meanwhile, China announced that same month the launch of the Asian Infrastructure Investment Bank by the end of 2015, involving 20 Southeast Asian and Middle Eastern countries. Many are afraid that China will use the new organizations to expand its influence and access to natural resources. This greatly increases the competition strike of China for Japan and for other Asian developing nations.

The parts of Budget 2015 relevant to the construction sector bode well for it in the long term, as they herald a continued focus on infrastructure development and a raising of skills sets, say industry observers and players. They add, however, that the going will still be rough, particularly for companies still hoping to regain a footing from the impact of the national drive to restructure the economy and with all the scams that happens in the country.

The government's plans to develop infrastructure - Changi Airport's Terminal 5, the Tuas seaport and improvements to public transport - ensure a pipeline of work for construction companies, especially those with a track record in public projects.

The Vietnam government is set to invest US$12.2 billion or VND193.6 trillion in construction projects for the implementation by subsidiary units. The ministry said it would focus on investing in and operating key projects relating to hydroelectric power, the development of urban and industrial areas, traffic and infrastructure.

The Thai construction industry registered a compound annual growth rate (CAGR) of 6.03% during the review period (2009–2013). This growth was supported by public and private investments in Thai residential, infrastructural and commercial construction projects. The introduction of Real Estate Investment Trust (REIT) in January 2013 also helped to boost the country's construction activities. Political and social uncertainties are expected to lead to comparatively moderate growth rates over the forecast period (2014 - 2018) when compared with the review period. The construction industry's output is expected to grow at a forecast-period CAGR of 3.19%, supported by the government investments in infrastructure development, with an aim to become the regional hub of the proposed ASEAN Economic Council (AEC) in 2015.

Government of Indonesia is committed to maintain the momentum of investment friendly environment and is exploring all options in encouraging private as well as community participation in infrastructure (create championship, eliminate flip flop policy). The Jakarta Mass Rapid Transportation project is expected to stretch across over 108 kilometers, including 21.7 kilometers for the north-south corridor (from Lebak Bulus to Kampung Bandan) and 87 kilometers for east-west corridor (from Balaraja to Cikarang).

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