Asia

ASIA (Asian countries are projected to see 2.8% to 4.8% GDP growth in the 4th Q of 2022): 

China is plagued by some stark economic challenges as we transition into 2023. Millions of Chinese citizens in more than 40 cities/regions have been instructed to remain at home under partial or complete COVID lockdowns.

China’s GDP growth rate for the 4th Q of 2022 is forecast to be between 3.3% and 3.6%, down considerably from 12 months ago. China’s economy is now growing at a slower rate than many of its Asian neighbors. This has not happened for more than 25 years. China’s zero-COVID lockdown course of action is one of the main reasons for this slowdown (many factories have been partially or fully closed for the best part of 6 months or more).

The Chinese housing sector is in danger of collapsing; in some cities, the housing market is in a free fall. Construction activity has slowed down considerably. Many construction workers are unable to show up for work due to the COVID lockdown protocols. Recent school graduates are having difficulties obtaining employment. Unemployment is very high for this age group. Supply chain issues are a big problem that will continue for the next 6 to 9 months.

China’s construction industry is experiencing a rapid slowdown from just 6 months ago; a slower growth rate appears to be the norm as we move into 2023. The halcyon days of record continuous construction growth would appear to be just a memory of just how many highways, bridges, and high-speed rail projects can be financed and built in China.

Look for China to expand its overseas infrastructure financing/loans and construction presence and activities in Asia, Africa, and South America as a lesser amount of Chinese domestic opportunities are available to the Chinese contracting companies.

Some Asian nations such as India, Bangladesh, Malaysia, Sri Lanka, Indonesia, Singapore, Pakistan, Philippines, Thailand, Vietnam, and Laos in 2023 have a huge need for new highways, bridges, and other transport and power-related projects.

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.

Escalation/Inflation is increasing in Asia, India is up to 9.5%, and Pakistan stands at 10.5%, the Philippines and Sri Lanka are both reporting 9 + % inflation rates. 

Instrumentation devices/process control equipment remains in short supply, and prices for these items continue to increase. Construction-related bulk materials such as copper (cable/pipe), structural steel, rebar, piping (PVC, CS, and SS), lumber, and plywood continue to increase in cost, which will impact future Asian construction costs.