In 2020, the coronavirus pandemic negatively affected the ASEAN region’s economy, as the construction sector was shut down in line with the lockdowns in some countries such as the Philippines, Singapore and Thailand, according to a statement released by the South East Asia Iron and Steel Institute (SEAISI). Many sources have forecast that the construction sector in ASEAN countries should recover in 2021, as it is the main sector in the ASEAN region used to boost the economy.
The growth rate of Indonesia’s construction sector remained positive at 0.2 percent in 2020. It is expected that the construction sector of the country to increase by 5.1 percent year on year in 2021. The Indonesian government expects to start delayed projects in 2021 and to also add to the 2021 budget around $29.4 billion to boost economic growth after the pandemic.
In 2020, the Malaysian construction sector contracted at 18.7 percent when compared to other sectors due to the pandemic. However, the country’s Ministry of Finance expects that the construction sector will grow at around 13.9 percent in 2021, with many infrastructure projects planned. The recovery is likely to start in the second half of the year.
The Philippines’ construction sector declined significantly by 9.2 percent in 2020 amid the coronavirus-related lockdowns. It is expected that the construction sector in the country will bounce back with a growth rate of 8.3 percent from 2021 until 2024. The expected economic rebound in 2021 will be supported by massive infrastructure investments to the planned amount of $24.4 billion.
In Singapore, the construction sector in the fourth quarter last year contracted by 28.5 percent, lower than the previous quarters due to the resumption of construction activities. The sector is expected to contract by 33.7 percent for 2020 overall. With more construction projects expected to come on stream and with the easing of restrictions, the construction sector will recover soon.
Thailand’s construction sector showed recovery signs in the third quarter of 2020. It is expected that spending on public construction projects will rise by 2-3 percent in 2021, according to a forecast by Krungsri Bank.
Being one of the fastest growing economies in the world during the Covid-19 pandemic, Vietnam’s economy grew by 2.9 percent in 2020, with a 6.76 percent growth rate in the construction sector.
As a result, most ASEAN-6 economies are working on accelerating public infrastructure projects to recover their economies. However, challenges remain as governments continue to impose measures against the backdrop of the coronavirus as they open up their economies. There are hopes that vaccination will allow the economies to open without fear of more outbreaks. The construction sector is expected to improve in 2021, but growth is going to be uneven across the region.