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Jun 15, 2023

Construction sector recovers amid healthy economy

Cambodia has witnessed its construction sector having recovered at a slow pace as it has been supported by the increase in foreign investment, especially on public physical infrastructure construction

Cambodia has witnessed its construction sector having recovered at a slow pace as it has been supported by the increase in foreign investment, especially on public physical infrastructure construction projects in the first half of this year, while the country’s economy is still healthy even though the inflation forecast for the second half is blur, said central bank’s latest report.

The Semi-Annual Report 2023 released on Thursday last week by the National Bank of Cambodia (NBC)—also the country’s monetary authority—pointed out that the construction and real estate sectors have recovered as the importing of construction materials and equipment has risen 0.4 percent in the first half of this year on a year-on-year basis.

The bi-annual report further pointed out that the values and areas of construction projects approved by the Ministry of Land Management, Urban Planning and Construction (MLPUPC) have been estimated to rise 1.3 times during the first six months of 2023 compared to the same period of last year, while the number of projects has fallen down nine percent.

“The construction sector has been recovered, which is reflected by the increasing imports of construction materials and equipment … the value and area are expected to increase, but the number of projects has fallen down,” the report pointed out. Some vendors said yesterday that their sales of construction materials and equipment have still been slow despite the recovery.

A sales staff, who declined to be named, of Sinh Hak Huot Co Ltd—one of the leading suppliers of construction materials and equipment in Cambodia ranging from ceramic, tile, sanitary ware, kitchen appliances and furniture—told Khmer Times yesterday that the sale made by the company has been better since early this year than the pandemic period.

“I cannot cover the countrywide market, but what I can say is that our sales look better since the beginning of this year. However, it is much slower if we compared it to when our country had not faced the pandemic. For example, now we have made some sales of floor titles as more different types of customers start to come and order more and more,” said the saleswoman.

Another vendor, who also declined to be named, but sells construction materials at Chhunit Supplies Construction Materials Shop in Phnom Penh Thmei quarter of Sen Sok district in Phnom Penh city, also told Khmer Times yesterday that his business has been going down since the Covid-19 pandemic struck Cambodia. “Our sales are very bad,” said the vendor.

The report stated that the housing prices in Phnom Penh have risen 6.9 percent year-on-year in the first six months of this year, while the housing prices in provinces have surged 5.3 percent, but the sales of all types of houses nationwide have dropped 64.7 percent, except sales of condominiums that have increased 12.9 percent year-on-year during this period.

Chea Chanto, who has just been appointed as NBC’s Honorary Governor, said in the report that Cambodia’s economy is expected to grow approximately 5.5 percent and the inflation rate is forecasted to fall about 2 percent as the fuel prices are expected to decrease, while the world economy has grown slower than last year and improved global supply chain.

“The inflation for the second half may face uncertainty,” the report pointed out, adding that the inflation rate is projected to increase to 2.7 percent in the second six months of this year after it has been at 1.2 percent in the first half of 2023, while the annual rate is projected to be 2 percent of 2023 as a whole. “Tourism has grown faster than expected,” said NBC’s report.

The report stated that the number of international tourists has risen 5.1 times to about 2.6 million year-on-year, while Thai tourists have dominated approximately 34 percent—the highest number among international tourists—followed by Vietnamese and Chinese tourists who are represented by 18 percent and 10 percent respectively, while the number of local tourists has risen 73.2 percent year-on-year to about 11 million.

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