The construction sector in Thailand is a critical pillar of the country’s economic development, with significant contributions to its overall growth. For the period 2024-2026, the sector is expected to achieve an annual growth rate of 3-4%, driven primarily by substantial government investment projects.
Government Investments and Infrastructure
The growth in the construction sector will be primarily fueled by large-scale government investments, particularly those related to the Eastern Economic Corridors. These investments focus on upgrading the country’s transportation infrastructure, including highways, rail networks, and ports, aiming to boost economic growth and improve connectivity across different regions of the country.
Private Investments and Real Estate Market
In parallel with state investments, private investments in residential and commercial real estate are expected to gradually recover. Improved consumer purchasing power, coupled with enhanced infrastructure, will contribute to the real estate market’s growth at an estimated rate of 3-3.5% per year. However, challenges such as oversupply in certain property segments, like luxury apartments, and continued pressure from construction costs may impact the market negatively.
Challenges and Technological Adaptations
The sector faces challenges, mainly due to rising construction costs, influenced by the prices of materials, energy, and transportation. Additionally, the push towards achieving net-zero emissions and the need for sustainable construction practices are accelerating the adaptation of companies in the sector. Firms are seeking new technologies to reduce material consumption and improve the energy efficiency of their constructions.
Conclusion
Thailand’s construction sector is at a critical juncture, with significant growth prospects but also important challenges to overcome. The successful implementation of government investments and the adaptation to new technological and environmental demands will shape the industry’s trajectory in the coming years.
With information from Thailand Construction, KPMG
