Asia's construction investment to outpace both Europe and US over the next five years

Rebecca Smith
The report said Asian's tiger cub countries could grow faster than the region's economic powerhouse - China
The report said Asian's tiger cub countries could grow faster than the region's economic powerhouse - China (Source: Getty)

Vast growth potential in the Asian construction sector is set to be tapped into over the next five years, with investment expected to average $1.61 trillion annually, outstripping comparable figures for Europe and the US.

According to research by Oxford Economics, resurgent growth among Indonesia, Malaysia, the Philippines, Thailand and Vietnam - the so-called tiger cub countries - looks set to fuel an Asia-wide building boom over the next decade.

Oxford Economics said construction investment in Asia is expected to average $1.61 trillion a year, versus an expected value of $697bn in the US, and $890bn in the EU.

Read more: The rise of young Asia: how millennials are transforming a region

Southeast Asian markets are among the world's fastest growing, and countries need to invest heavily in infrastructure such as transport and utilities, in order to fulfil their long-term potential and maintain their growth trajectory.

Previously, the pace of hefty construction programmes across the region had been hindered by public finance constraints, limiting the available funding, but Oxford Economics said reviving growth in the area will provide a stronger foundation for increasing infrastructure investment.

(Source: Oxford Economics)

Rising living standards and incomes for the region's 625m people will also lead to demands for better quality housing and public facilities.

Across the Association of South East Asian nations (Asean), there is a large under-supply of housing, which combined with the need for commercial real estate and infrastructure to service both sectors, will drive a strong growth path over the next five years for construction in the region.

With investors and construction firms from Hong Kong, Singapore, South Korea and Taiwan "jostling to invest in, and expand into" the Asean countries, looking for stronger investment returns than those expected in their own economies, Oxford Economics says the overall outlook for construction in Asean "looks buoyant".

Read more: Here's how much billionaires have increased their wealth

Related articles