This year's construction industry output growth rate in Northeast Asia has been lowered to 1.1%, while the forecast before the new crown epidemic was 4.2%.
According to data from the data and analysis company GlobalData, Northeast Asia is the region with the largest gross output value of the global construction industry. Although China's new crown epidemic is more serious, it is still expected to achieve positive growth in 2020.
China is the first country in the world to be diagnosed with new coronavirus cases, and the blockade measures implemented by its government are considered strict. But with the government’s investment in infrastructure, the Chinese economy has shown signs of recovery in recent months.
Mr. Liu, vice president of XCMG and overseas general manager of XCMG, recently positively evaluated KHL's Chinese construction industry and XCMG's ability to overcome the devastating impact of the new crown epidemic.
He revealed, "In the first three months of this year, the sales of all XCMG brands fell by 10%, and the sales of the entire industry fell by about 7%-8%. However, from January to April, the sales of XCMG export products An increase of 32%."
China's construction industry is rapidly recovering. According to the China Construction Machinery Industry Association (CCMA), China's excavator sales reached a record level in March 2020.
GlobalData reports that investment activity also started to pick up in March and then accelerated in April. The latest data shows that investment in fixed assets and real estate has made further progress. Investment in real estate development in April increased 7% year-on-year, after a slight increase of 1.1% in March and a contraction of 16.3% in the first two months.
Quarterly value-added construction data from the region showed mixed results. China’s actual growth rate fell by an unprecedented 17.5%, while Hong Kong, China, fell by 9%. However, South Korea’s industry grew by 3.2%, while Mongolia’s growth rate was 11.9%.
"The trade disruption is likely to pose a major challenge to export-oriented economies, such as South Korea and Taiwan and Hong Kong. The reduction in the scale of expansion due to cash flow problems has affected the poor performance of the industrial construction industry." GlobalData Said Dhananjay Sharma, a construction analyst.
As the Japanese government announced emergency measures, major construction contractors temporarily suspended their work in the country, and construction activities in Japan were affected.
In South Korea, the government’s extensive tracking and detection methods have played a role in limiting the spread of the virus, but despite the industry’s better-than-expected performance, the total number of construction orders received in the first four months of this year fell by 11.8%.
GlobalData reported that before the outbreak of the new crown epidemic, the construction industry in Hong Kong, China was already in trouble, with production shrinking by 9.3% in 2019. Affected by the outbreak of the New Coronavirus and political factors, the tension has intensified again, leading to further deterioration of the situation.
It is expected that the U.S. government’s trade war with China and the abolition of U.S. special treatment for Hong Kong will reduce U.S. investment in Hong Kong’s industrial construction, and its business sector will be affected by the reduction in tourist flow.
"Due to China's recovery and South Korea's better-than-expected growth, the industry is expected to grow by 5.7% in 2021 and an average annual growth rate of 4.2% in 2021-2024," Sharma said. "This will be attributed to the fact that China's construction industry is becoming more and more mature, and the government is focusing more on new infrastructure including 5G networks and data centers."
Other countries in the Asia-Pacific region, especially the Philippines and Vietnam in the southeast, are seen as well-positioned to invest in infrastructure with a view to promoting economic growth after the new crown crisis.
In the past five years, led by Asia, global infrastructure construction has grown at an average annual rate of 3.2%, of which the average annual growth in infrastructure construction in Northeast Asia is 5.4%, and the average growth rate in South and Southeast Asia is 6.8%.
