ASIA (Asian counties are projected to see a substantial reduction in GDP growth in 2020)
The Coronavirus Pandemic has caused the cancellation of the upcoming Olympics in Japan. Japanese Prime Minister Shinzo Abe pronounced in mid-March that the 2020 Summer Olympic Games will be postponed. Initial plans are to have the Summer Olympic Games in mid-2021.
The Chinese economy & construction sector will experience an unprecedented slowdown in 2nd & 3rd Q of 2020, as the Chinese Government retrenches & comes to terms with the fallout of the Coronavirus Pandemic. Industrial & commercial activity in China went negative for the most part, not seen in the last 25 years. Construction, housing, factory output all have experienced major downturns that will take many months to recover to pre-Pandemic levels.
China needs to continue with its mitigation actions to stop the spread of the Coronavirus Pandemic to other population centers outside of Wuhan, this is still a major challenge.
Some good news to report – A lot of factories in China are now back & running, perhaps at 65% efficiency levels from pre-Pandemic levels, they are still wrestling with material, component shortages & labor issues. China has in the last couple of months experienced major transportation / logistical problems. The severe quarantine restrictions & Government protocols have resulted major grid locks in ports & rail / logistic centers, there are literally 1,000’s & 1,000’s of freight containers stacked up in ports awaiting expediting activities.
Hong Kong in the last couple of months has seen a big construction labor related layoff that could be in the 20% to 30% region, this situation in other Asian construction markets is thought to be similar.
Indian Prime Minister Narendra Modi declared mid-March that the country would be imposing a lockdown on Indians moving / traveling outside their homes to prevent the spread of the Coronavirus Pandemic. Prime Minister Narendra Modi has earmarked a $2 billion fund to mitigate the effects of the Coronavirus Pandemic on the Indian population & industry.
Many Indian planned or ongoing construction projects need to be reevaluated, delayed or in the most unpleasant case cancelled. The Coronavirus Pandemic will negatively impact all Asian economies and construction sectors for the balance of 2020 and most probably into 2021.
A lot of Asian countries will see a pullback on construction projects in the next 2 to 3 months due to the issues described above. The fact is that many Asian related construction projects will be delayed, deferred or worst case situation cancelled due to the (COVID-19) virus, this situation short term could ramp up current construction unemployment rates.