Increased residential, office and retail demand fueling rise in construction imports
Increased residential, office and retail demand fueling rise in construction imports
Cambodia spent more than $414 million on imported construction materials to meet increasing demand in the local construction and property sectors last year – a rise of 7 per cent compared to 2012.
According to officials and industry insiders, the increased value of imports reflected steady growth of the construction and property sectors. They also suggested that the improving numbers were evidence that both local and foreign confidence continued to be high when it came to investing in the property sector, despite some domestic turmoil in the wake of national elections.
The Kingdom’s disputed election results in July of last year have continued to incite protests and some violence, but appear to have had little effect on business confidence or economic growth, which has remained steady.
Ken Ratha, spokesman for the Ministry of Commerce, said the increase in imported construction materials was a sign that the property sector was seeing renewed growth, while the overall construction sector was continuing to move in a positive direction, particularly in the areas of residential property developments in the boreys on the outskirts of Phnom Penh.
Ratha added that construction companies were making large-scale domestic investments due to increased demand for better housing in the Kingdom.
“Due to residential-sector growth, both local and overseas investors are injecting more capital into the construction sector,” Ratha said.
He added that a corresponding development was the establishment of increasing numbers of small- and medium-d enterprises (SMEs), as well as large-scale enterprises, all of which were boosting the property sector.
“The important thing is that investment in the sector is now shared by both local and foreign companies,” the spokesman said.
Meanwhile, deputy general director of the Construction Department of the Ministry of Land Management, Urban Planning & Construction Lao Tip Seiha recently told the Post that Cambodia’s strong economy was the major contributing factor in terms of increased investment in the construction sector.
According to government data, the ministry approved 1,641 projects covering a total area of 7.5 million square metres, and a total value of $2.8 billion in 2013, or an increase of 31 per cent year-on-year.
In 2012 1,694 projects were approved, with a total area of 6.5 million square metres and total investment of $2.1 billion.
“Obviously, the construction sector has seen remarkable growth, particularly in Phnom Penh, which has seen a lot of construction of condominiums and apartments, and residential and office space,” Tip Seiha said.
Socheat Yutharo, marketing and sales manager of K Supply, a construction equipment and materials company, said K Supply’s imported products had risen between 25 and 30 per cent in 2013 compared to 2012 due to increased orders from existing customers.
Yutharo added that K Supply experienced a lull in orders during the period of the national elections, but they revived later in the year despite some unrest on the streets and concerns among the local business community.
“Customers put a hold on some of their projects after national elections, but by late 2013 they resumed operations, so K Supply’s products ended up doing well,” he said.
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