The land ministry approved a total of 4,275 construction investment projects in 2022 – down 28 projects or 0.65 per cent from a year earlier – with total registered capital of $2.968 billion, down 46.8 per cent on a yearly basis from $5.580 billion, according to the finance ministry.
The housing segment represented 3,768 of the projects – up from 3,720 a year earlier – or an 88.14 per cent share of the total, up from 86.45 per cent in 2021, the Ministry of Economy and Finance noted in its 2022 Socio-Economic Trends report, without providing the value of these developments.
In earlier Economic and Financial Statistics Bulletins, the ministry broke down the 2022 approvals by category: residential (3,768), commercial (228), industrial (184), public (58), tourism (36) and other (1). The corresponding 2021 figures were: residential (3,720), commercial (301), industrial (184), public (47), tourism (49) and other (2).
Cambodia Constructors Association general manager and secretary Chiv Sivpheng suggested to The Post that recovery in construction and real estate should take longer than in other fields, stressing that the year since the Kingdom’s end-2021 reopening is not enough for a decisive return to normality for investment in these sectors.
On the other hand, locally-owned housing developments make up the bulk of the projects that are witnessing encouraging progress at the moment – albeit still at a somewhat slower pace overall than desired, he said.
“In 2022, the Covid-19 situation continued to pose serious threats, and a sharp decline in foreign visitors to Cambodia – at least when compared to before 2020 – led to economic activities – especially in the large-scale construction segment – not doing so hot.
“Everyone knows that before 2019, Chinese investors played an important role in the Cambodian construction sector. Therefore, the return of Chinese tourists and investors from February 2023 will help the sector advance slowly, albeit without sudden jumps,” he said.
Sivpheng was alluding to a scheme that kicked off on February 6, in which Beijing authorised travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, so long as they are restricted to Cambodia and 19 other countries.
“Lockdowns in China in 2022 and global economic uncertainty caused by geopolitical conflicts – especially the war in Ukraine – reduced flows of international capital in almost all areas,” he lamented.
Global Real Estate Association president Sam Soknoeun ascribed the slump in the Cambodian construction and real estate sectors over the past two years to global economic woes triggered by Covid, the Russo-Ukrainian conflict, Sino-US competition for influence, and elevated oil and food prices.
All of this puts tonnes of pressure on the construction sector, where projects require millions of dollars in investment, of which foreign sources have historically accounted for substantial amounts, he stressed.
Accompanying the drop in construction activity and project requests is an “easily” noticeable decrease in consumer demand in the market, he pointed out, adding that the Covid crisis significantly dragged down consumer purchasing power over 2020-2022.
“When orders dry up, the pace of construction will slow down, or even stop temporarily,” Soknoeun said. “If there aren’t many large-scale foreign investors coming back, the Cambodian construction and real estate sectors in 2023 will remain as downbeat as in 2022.”
Meanwhile, on March 29, the Council of Ministers issued a document enacting incentives and package measures to address the issue of the hundreds of buildings that have been left abandoned or unfinished in Preah Sihanouk province – mostly attributed to a Covid as well as an online gambling ban – seen by many as blemishes on the landscapes of the coastal region.
The move purportedly aims to build confidence among investors and resolve short-, medium- and long-term market demand issues in the southwestern province.
Cambodia’s “iron and steel” imports in 2022 clocked in at $359.819 million, rising by 23.08 per cent year-on-year from $292.339 million, according to Customs (GDCE). This category of items, corresponding to Chapter 72 of the harmonised tariff schedule, accounted for 1.202 per cent of the $29.942 billion value of the Kingdom’s total imports over the year.
The GDCE did not reveal any tonnage figures. To clarify, these imports do not include “articles of iron or steel”, which instead fall under Chapter 73 of the tariff schedule.
Trading Economics data 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).