Construction in the member states of Association of South-East Asian Nations (Asean) region is poised to grow by over 6 per cent annually over next five years, according to a report by leading data and analytics company GlobalData.

The combined value of mega-projects (with a minimum value of $25 million) across Asean stands at $2.9 trillion, said the report.

This includes all projects from the announcement stage to execution. An analysis of the pipeline by stage reveals that the region provides huge opportunities with respect to a large volume of early stage projects, stated Global Data in its recent White Paper prepared for Intermat Asean 2018 and Concrete Asia 2018, the region’s trade shows for construction, infrastructure and concrete sectors to be held in Bangkok from September 6 to 8.

Just under $1.5 trillion of projects are currently in the planning and pre-planning stages, suggesting significant construction spend is to occur for some time, it added.

"The South-East Asia region continues to develop at a rapid pace, with economic growth projected to reach an annual average rate of 5.1 per cent during 2018–2022, the fastest among all global regions, and an acceleration from the healthy rate of 4.8 per cent recorded in the past five years," noted Danny Richards, GlobalData’s Lead Economist for Construction Industry.

Much of this growth is being driven by investment in new infrastructure, while increasing domestic demand is driving the expansion in construction of buildings across the residential and non-residential sectors.

"Although there are disparities in the pace of growth in construction output among the Asean member states, the region’s construction industry as a whole will grow by 6.1 per cent on an annual average basis in the next five years," noted Richards.

This is marginally behind the projected growth of 6.5 per cent in the thriving emerging markets in the Middle East and Africa, but the Asean region presents investors and developers with a lower level of risk of projects being put on hold or cancelled, according to GlobalData’s Construction Risk Index.

Richards pointed out that the reforms to encourage Public Private Partnerships (PPPs) were almost universal across the Asean region.

The Philippines, Myanmar, Laos and Vietnam have undergone reforms to create more accessible markets for private sector investment in construction through PPPs. Indonesia has undergone similar reforms, expanding the construction sectors eligible for PPPs and increasing incentives to invest, he noted.

According to the report, land ownership was another area that was under reform.

Once a notoriously difficult process, acquiring land in Indonesia is now much fairer and more transparent. Vietnam has also implemented an initiative in which foreign investors are allowed to acquire land and hold a majority stake in a commercial or residential project, it added.-TradeArabia News Service