7 11月 2018
The inaugural RICS Asia-Pacific Construction and Infrastructure survey shows workloads are expected to increase over the next 12 months across most Asia-Pacific countries, though profit margins are being squeezed as costs are expected to continue rising and barriers remain in certain markets.
Respondents to the RICS Q3 Global Construction and Infrastructure market survey from the Asia-Pacific region reported a mix of headline activity during Q3 of 2018. Respondents in Vietnam, New Zealand, Australia and India reported an increase in total workloads during Q3, while workloads in China, Sri Lanka and Hong Kong were little changed.
Contributors in Singapore reported a modest decline in overall activity, while those in South Korea and Malaysia saw workloads decline at a slightly quicker pace. Despite mixed current conditions, the outlook for workloads across most markets is positive. The exception was South Korea, where headline workloads are still expected to post a slight decline over the next year.
Credit conditions were supportive of activity in most markets during the quarter, with the exception of Malaysia. Although credit conditions are generally seen remaining largely unchanged over the next twelve months, respondents in Australia see some risk of deterioration while those in India expect credit conditions to improve.
A majority of respondents across all countries included in the survey, with the exception of South Korea, reported additional hiring to support new workloads. Tender prices for both building and civil engineering increased across most regions, though was more muted in Hong Kong, Singapore and Malaysia.
Tender prices for both building and civil engineering increased across most regions, though was more muted in Hong Kong, Singapore and Malaysia.
Despite the increase in workloads in some markets, profit margins were reported to have seen some degree of compression outside of Australia and New Zealand, and the outlook for margins remains mixed over the next year. Respondents in Vietnam, and to a lesser degree Australia and India, are expecting to see margins widen, while little change is expected in New Zealand and Singapore. Meanwhile, contributors in Hong Kong, China, Malaysia, Sri Lanka and South Korea foresee further margin compression.
Survey respondents cited several factors that were restraining activity in the sector. Although there was some degree of variance by geography, most Asia-Pacific respondents identified financial constraints and competition as chief amongst these. Meanwhile, in New Zealand and Sri Lanka, a shortage of skills was seen as being particularly restrictive. A majority of respondents in both of these markets, as well as in China, India, South Korea and Vietnam, identified a shortage of quantity surveyors/commercial managers.
Conditions for infrastructure were similarly mixed across Asia-Pacific. Respondents in India and Australia reported a robust increase in infrastructure workloads during Q3, while contributors in Singapore, China, and Malaysia also reported a more modest increase (in net balance terms).
Infrastructure workloads in Sri Lanka, Vietnam and Hong Kong were reported to have been little changed in Q3. This is despite ongoing investment in One-Belt-One-Road projects in these regions, and in the Greater Bay Region in Hong Kong, though some major rail projects have recently been completed in Hong Kong.
South Korea and Malaysia were the two regions to report a decline in infrastructure workloads during Q3. In Malaysia, some of this may be attributed to continued policy uncertainty, as the recently elected government continues its review of infrastructure projects.
A majority of respondents in almost every region included in the survey, see new infrastructure projects continuing to need to be prioritized over the repair and maintenance of existing projects. The lone exception was in South Korea, where respondents were spilt roughly 50/50 over the need for new projects vs the repair and maintenance of existing projects.
RICS’ Asia-Pacific and Middle East Construction and Infrastructure Survey is a quarterly guide to the trends in the construction and infrastructure markets. Survey questionnaires were sent out on 24 September 2018 with responses received until 21 October 2018. Respondents were asked to compare conditions over the latest three months with the previous three months, as well as their views as to the outlook. A total of 984 company responses were received.
The report is available along with other RICS market surveys covering the housing market, residential lettings, commercial property, construction activity and the rural land market.