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Q4 construction project value up 9.3%

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A construction worker on top of a building in the capital’s Meanchey district in 2021. Hong Menea

Q4 construction project value up 9.3%

The Ministry of Land Management, Urban Planning and Construction approved a total of 1,100 construction investment projects in the fourth quarter of 2022 – up 60 projects or 5.77 per cent year-on-year – with total registered capital of $1.0092 billion, up 9.3 per cent on a yearly basis from $0.9230 billion, albeit lower than in the same time of 2020.

In its Economic and Financial Statistics Bulletin released on March 20, the Ministry of Economy and Finance broke down the October-December approvals by category: residential (943), commercial (73), industrial (55), public (17) and tourism (12).

“Cambodia’s construction sector is projected to have grown at a slower pace of 0.5 per cent in 2022, lower than the three per cent mid-year forecast due to a continued trend of declining foreign investment inflows – particularly to high-cost construction, such as the commercial and tourism segments,” the bulletin said.

It attributed the decline in registered investment capital over the 2020 period to sluggish growth in construction activity on low- and medium-cost projects, and a contraction in the same for high-cost developments.

For comparison, in the fourth quarter of 2020, the land ministry greenlit 1,102 construction investment projects with total registered capital of $1.8853 billion, the bulletin noted. This means that the October-December 2022 registered-capital figure marked a 46.47 per cent drop from two years earlier.

Cambodia Constructors Association general manager Chiv Sivpheng told The Post on March 21 that the construction sector has witnessed a notable pick-up in recovery pace since end-2022, as economic activity ramps back up and tourists as well as investors return to the Kingdom amid diminishing Covid-19-related concerns.

With Chinese investors having propelled the Cambodian construction and real estate sectors prior to the advent of Covid, their comeback – and that of their tourist compatriots – should drive recovery, at least in the former sector, he reckoned.

“The situation on the whole will remain positive in 2023, as will the return of Chinese tourists and investors following the jump seen in February,” he said, affirming that work involving locally-invested construction projects has also gained considerable steam.

Huy Vanna, secretary-general of advisory firm Housing Development Association of Cambodia (HDAC), remarked that the long timeframes associated with projects – with some exceeding five years – translates into a longer recovery period for the construction sector compared to others.

The current, wide-reaching economic recovery has overall prevented construction from relapsing into negative growth territory, as it had during the height of Covid, he said, stressing that the sector still needs more time to make a more complete recovery.

The drop in number of projects was mostly driven by a plunge in foreign-invested developments, he claimed, underscoring that locally-invested projects have generally advanced at a normal pace.

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, of which $134.04 million was from mainland China, $124.4 million from Vietnam and $6.41 million from Thailand.


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