Cambodia spent $159.755 million on imports of “iron and steel” in the first five months of the year, rising by 6.61 per cent year-on-year from $149.844 million as well as by 12.78 per cent half-on-half (compared to July-November 2022) from $141.65 million, according to provisional Customs (GDCE) data compiled in “International Merchandise Trade Statistics” bulletins.
Construction industry insiders have largely attributed the gains to the restart of work on several projects that had been put on hold for years.
This category of items, corresponding to Chapter 72 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 1.580 per cent of the $10.109 billion value of the Kingdom’s total goods imports over the five months – compared to 1.148 per cent and $13.057 billion in January-May 2022, as well as 1.192 per cent and $11.882 billion in July-November 2022.
The GDCE did not provide any tonnage figures. To be clear, “articles of iron or steel” are not included in these imports as they are covered instead by Chapter 73 of the tariff schedule.
Housing Development Association of Cambodia (HDAC) secretary-general Huy Vanna told The Post on June 13 that the number of active construction sites and levels of activity in the first five months of 2023 were generally unchanged compared to a year earlier, as were the prices paid by the construction sector for iron and steel.
Investment has declined practically everywhere and across almost all sectors due to the current state of economic uncertainty worldwide, Vanna claimed. Locally, Cambodia’s heavy reliance on foreign investment over the past decade has amplified the adverse effects of the ongoing global economic downturn on the domestic construction sector, he added.
“The sector still needs more time to recover,” Vanna stressed.
In May alone, the Kingdom imported $30.712 million worth of “iron and steel”, up 1.96 per cent from $30.122 million in May 2022 (year-on-year), up 20.2 per cent from $25.544 million in November 2022 (half-on-half) and up 11.8 per cent from $27.464 million in February 2023 (quarter-on-quarter), but down 14.1 per cent from $35.752 million in April 2023 (month-on-month), according to GDCE figures.
The May 2023 figure was down 39.09 per cent from the record $50.422 million registered in May 2019, as indicated by GDCE statistics for the 2015-2023 period. The next highest values for the aforementioned timeframe are $47.284 million (October 2019), $46.060 million (August 2019), $41.380 million (February 2019) and $40.634 million (November 2019).
In May 2023, Chapter 72 items made up 1.407 per cent of the Kingdom’s overall imports, which totalled $2.182 billion. For comparison, here are the corresponding figures for: May 2019 (2.526%; $1.996B), May 2022 (1.00%; $3.014B), November 2022 (1.324%; $1.929B), February 2023 (1.674%; $1.640B) and April 2023 (1.730%; $2.067B).
Cambodia Constructors Association general manager Chiv Sivpheng recalled how drastically Covid-19 and its accompanying restrictions slowed down the local construction sector, reversing roughly a decade of brisk growth, and abruptly stopped work on larger construction projects – the majority of which are owned by foreign investors.
Last year, however, the sector began to recover in earnest from the pandemic’s disruptive wake, he contended.
“The Cambodian construction sector’s resurgence can be seen through the quantity of investor project applications along with the number of approvals by the authorities,” Sivpheng said, predicting that imports of construction materials will increase in tandem with the sector’s expansion.
The bulk of the imported iron and steel used by construction players is sourced from Vietnam, China and Thailand, he shared.
According to the GDCE, “iron and steel” represented $359.819 million or 1.202 per cent of the Kingdom’s total $29.942 billion in imports for 2022, respectively marking 23.08 per cent and 4.32 per cent increases from $292.339 million and $28.703 billion in 2021.
Last year’s Chapter 72 imports also surged by 114.93 per cent against the $167.411 million registered in 2015 – equivalent to a compound annual growth rate (CAGR) of 11.55 per cent for the seven-year period.
The most recent data from Trading Economics similarly shows that, in 2021, Cambodia imported “iron and steel” worth a total of $292.34 million, with notable sources including mainland China ($134.04 million), Vietnam ($124.4 million), Laos ($10.14 million), Japan ($7.17 million) and Thailand ($6.41 million).