Asia
ASIA (Asian countries are projected to see 3.1% to 4.6% GDP growth in the 2nd Q of 2023):
China’s economy has struggled in the last 12 months, not helped by expanding COVID lockdowns. But new initiatives and infrastructure investment are encouraging some growth. Supply chain interruption issues are improving with China terminating its COVID lockdown. However, China continues to encounter economic headwinds as we move further into 2023. China estimates that in 2023 an economic growth target of between 4%-5%, down considerably from previous years (excluding the recent COVID years). China’s economy and construction sector was assumed on the ropes after China’s Government mandated zero COVID policy was in effect. Many China experts were forecasting minimal economic growth, and multinational manufacturing companies were thinking of relocating to other Asian countries. Well, these unfavorable forecasts may be overstated. The rigid COVID measures have now been suspended, and economic and construction activity has started to pick up once again. China’s Government reported inflation of 2.3%, which is very low compared to other major countries. This rate is possibly open to interpretation, similar to the low COVID casualty rate reported by China. Many new rail and highway infrastructure projects have been announced in recent weeks.
India is experiencing a construction boom and is forecast to see annual growth in its construction sector of 8% to 11% in 2023 and 2024. Ten years ago, the majority of major US & European industrial / manufacturing companies were directing their CAPEX capital investments into China. However, with all the recent political posturing, territorial disputes & COVID-related shutdown issues, China has experienced a slowdown in capital investment. We are seeing more US & Western European capital investment shifting into India. India is now viewed now as the place to build new manufacturing/production facilities.
India is set to overtake China as the world’s most populated country in 2023, with a population of 1.425 billion. We are seeing more US & Western European capital investment shifting into India. India is now viewed as the place to build new manufacturing/production facilities.
In India, the military standoff between India and China in the northern Himalayan region is tenuous and threatening, with troops positioned in close proximity to each other. Both countries are claiming sovereignty of the disputed border area.
Indonesia started construction on its new futuristic capital, “Nusantara.” In 2022, after Indonesia’s President Widodo proclaimed that Jakarta (the current overcrowded, unhealthy, and polluted capital), which is predisposed to earthquakes and flooding and is steadily submerging below sea level, would be withdrawn as Indonesia’s official capital city. The new capital, 1,300 km (800 miles) away from Jakarta, will be on the island of Borneo. Thousands of construction workers are currently clearing the Nusantara site, installing utilities, roads, and temporary worker camps. Construction of this new capital will take at least 5 years or more and cost many billions of dollars.
Japan’s construction industry, for the sixth year, continues to experience slow or minimal growth in its civil/infrastructure, home building, commercial, institutional, and industrial sectors, perhaps mirroring Japan’s steadily declining and aged population. Japan’s construction industry is forecast to grow by 1.5% to 2.5% in 2023 from the previous year.
Some Asian nations such as India, Bangladesh, Malaysia, Sri Lanka, Indonesia, Singapore, Pakistan, Philippines, Thailand, Vietnam, and Laos have a huge need for new highways, bridges, and other transport and power-related projects.
Escalation/Inflation is starting to trend downwards in Asia. India is experiencing 6.5% inflation. Pakistan stands at more than 15% inflation. The Philippines & Sri Lanka are both reporting 8+ % inflation rates.
