Business & Economy

Double-digit growth seen for construction sector in 2014

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The country’s construction sector is expected to post a double digit growth next year with at least 40 percent share in the first quarter’s gross domestic product (GDP).

 

In the press briefing held during the opening of trade show Philconstruct on (Tuesday) November 6, Philippine Constructors Association, Inc. (APC) President Augusto Manalo said the volume of work in construction both for public and private projects can amount to “around P400 billion” in 2014, contributing to almost half of the country’s economic growth. “I think at least another 1.5 percent for the first quarter so at least 40 to 50 percent of the growth of the economy for next year,” Manalo says.

The country’s value of projects in construction is expected to gross at P380 billion this year, a P70 billion increase from last year’s.

“The gross value in construction work (public and private) in the first half of 2012 was P232 billion,” Manalo shares. “Then for the first half of 2013 it was P287 billion. So there’s a growth of 23.7 percent growth.” He added that with the number of projects lined up by the government and the private sectors, the construction sector can expect more growth.

PCA Executive Director Manolito Madrasto shared that 35 percent of the country’s eight percent GDP growth in the fourth quarter can be attributed to the construction sector. The construction sector was also one of the biggest contributors to the country’s industry’s growth posting a 32.5 percent share during the first quarter.

“This year alone, in the infrastructure, our public works has spent around a little less P200 billion, and next year the projected amount is around P260 billion,” Manalo adds. According to him, the private sector has also lined up a lot of committed projects, primarily in the power sector and in PPP (private-public partnership) projects. He cited Cavite-Laguna (CALA) Expressway and the NAIA Expressway as examples.

The construction sector’s share of investment during the first half of 2013 reached 46.4 percent. This is the total registered investment which comprises of foreign, local, public, and private investments for this year, according to Manalo.

Just the same, the infrastructure spending between public and private sectors remains to be dominated by the private sector.

“As a growing country, it should be a 60 is to 40 percent sharing between the public and private sectors but there are some problems in the public sector as such that the 60-40 is leaning more on the private sector,” he says. At present the sharing is 45 is to 55 percent in favor of private spending.

He added that the existing infrastructure and projected projects for 2015 to 2016 for public works can already be covered by the private sectors. “Now what is missing is on the area of transportation. That will be the one that will fan the fires for more investments in the country, both domestic and foreign,” Manalo points out.

By 2015, PCA sees both foreign constructors and local constructors with 100 percent foreign equity to come to the country.

Globally, Asia continues to grow in the construction spending. Data from the Asia Construction Outlook (ACO) shows that Asia construction spending reached $2.8 trillion in 2012, accounting for “some 40 percent of global construction spending.” Manila Bulletin

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