Construction revival boosts iron, steel imports
Construction revival boosts iron, steel imports
In the first month of 2024, signs of improved global and regional economies have led to a revitalisation of Cambodia's construction and real estate activity, with the government investing over $45 million in steel and iron imports.
According to the General Department of Customs and Excise (GDCE), imports of good classified under Harmonised System (HS) Code 72, which include iron and steel, totalled $45.53 million in January.
This marked a 44% increase compared to $31.61 million in January 2023 and a 16% rise from $39.24 million in December 2023. Code 72 imports accounted for 2.2% of the country’s total imports for the month, which totalled $2.09 billion.
Chiv Sivpheng, general manager of the Cambodia Constructors Association (CCA), explained to The Post that the Covid-19 pandemic from 2020-23 caused a significant downturn in the global construction sector, including the Kingdom's.
He said many construction sites were entirely halted, while others proceeded at a reduced pace. Because of this, he said the demand for construction materials such as steel, cement, bricks and electrical equipment also declined.
Sivpheng noted that from the end of 2023, some unfinished construction sites started to gradually resume activities.
"Since the construction sector is closely linked to economic growth, as the global economy grows stronger, the global construction sector moves faster. The imports of iron and steel will continue to increase in the future,” he stated.
However, he noted that the sector typically requires more capital investment and a longer time to recover compared to other sectors, so the pace of recovery would not match the speed of some other sectors.
According to Sivpheng, iron and steel imported for construction mostly come from Vietnam, China and Thailand.
Long Dimanche, deputy governor of coastal Preah Sihanouk province, stated this week that the government's measures, announced at the end of January, aim to promote business and investment activities in the province.
He said the initiatives are becoming a driving force for gradual progress in construction in the province.
"Nearly a month ago, four or five companies applied for investment in the construction sector, while many others are studying and preparing to apply for special investment rights," he said.
Dimanche added that the state of construction and real estate in Preah Sihanouk at the beginning of 2024 is considerably improved compared to the start of 2023, although not yet reaching the robust levels seen before 2019.
"The construction, renovation and organisation of various buildings and locations to support business and other investments in Preah Sihanouk are showing positive signs once again. Although the progress is not rapid, we are seeing a gradual improvement," he said.
Dimanche highlighted that currently, there are numerous large buildings in the province, with more than 360 unfinished, and approximately 160-170 completed but not yet operational.
He expressed confidence that investment and construction this year will progress more swiftly than in 2023.
At the Cambodian Valuers and Estate Agents Association’s (CVEA) annual meeting on December 11, Cheng Kheng, CEO of CPL Real Estate, who possesses three decades of experience in the country's real estate and construction sectors, commented on the industry's performance.
He noted that from early 2020 to early 2023, the sectors faced challenges due to the Covid-19 crisis, geopolitical conflicts and wars in some countries.
However, he noted signs of recuperation in the market, indicating an emerging positive trend.
"In general, I see that at the end of 2023, real estate and construction activities had gradually resumed. I think this is a good sign that the sector will return to normal in 2024," he stated.
In 2023, Cambodia's imports of Code 72 products amounted to $372.47 million, a 3.5% increase from $359.82 million in 2022, according to the GDCE.
