Philippines is one of the SEA countries that got severe economic crisis caused by the covid-19 pandemic. However, the construction business Philippines is predicted to recover quickly. This sector is now offering new opportunities for investors and business owners
On the other hand, certain challenges are still present. It is why investors and business owners need to have a better understanding on the sector’s key drivers, trends, and other aspects post-covid.
A Glance of the Philippines’ Construction Industry
The construction industry in the Philippines received a severe blow from the pandemic. In 2020, it contracted by 30%. This significant contraction was mainly the result of cancellations and delays of construction projects and the reduction of the government infrastructural spending.
It is expected that the industry will show an annual growth at 21.9% in 2021. However, the uncertainties of the pandemic may temper this positive recovery.
This year, the government approved 80% of its infrastructure projects in order to revitalize the economy. Transportation, urban development, and ICT infrastructure projects are among the focuses of the government infrastructure program.
Construction Business Philippines: Key Drivers and Opportunities
Certain factors boost the growth of the Philippines’ construction industry in 2021. One of them is the transportation infrastructure. Rail and road development is crucial in supporting the growth of infrastructure and construction business Philippines today and many years onward
Without this development, construction materials will not be delivered at the construction site effectively and efficiently. Another key driver for the construction sector growth is the government program, Build Build Build.
This program is aimed at generating new jobs and achieving more connected and developed life among the Filipinos. It contains a number of construction and infrastructure projects. However, in 2021, only several of them have been completed. There are still 31 projects that have yet to be completed.
Due to these key drivers, construction companies have better opportunities in gaining profit from the Philippines’ construction industry. With the right strategy, the companies will thrive and grow profitably.
And due to the Build Build Build program, the government needs large amounts of funds for its projects. Therefore, investors have an option to invest their funds on the government construction projects and gain some profits from them.
Challenges in the Philippines’ Construction Industry
However, construction business owners or investors in the Philippines must not ignore the challenges that present in the country’s construction industry. One of them is the logistics in the Philippines.
Construction projects that need construction materials from other countries generally take more time to complete due to the inefficient custom clearance processes and manual processes in the delivery of goods.
This traditional practice must be replaced by digitization if the country wants to smoothen the completion of their crucial infrastructure and construction projects. In addition, the uncertainties posed by the pandemic have made the Filipinos spend their money cautiously.
As a result, certain construction projects, such as housing and apartment projects, may not be highly demanded. Therefore, construction companies need to be considerate in choosing private construction projects they want to be implemented.
To find out the detailed information about the key drivers, opportunities, and challenges of the Philippines construction industry, you can call Philippines’ market research company. This company will not only give you the data you need, but also help you create the right strategy to gain high ROI.