APAC Construction Forecast 2022
APAC Construction Forecast 2022
APAC Construction Forecast 2022
Construction
Forecast
Building Back Smarter and Faster in 2022
— IN T R ODUC T I ON
There is no doubt the last two years have been challenging for almost every country
in the world. In response to the adversity caused by the pandemic, the catchcry of
economists and governments has become “build back better”, and for the construction
industry, the emphasis on “build” is the good news we needed.
Ric Deverell
Macquarie Group Chief Economist
Contents
01 The Big Shifts 04
03 Australia 11
04 New Zealand 15
05 Singapore 18
06 Philippines 21
07 Malaysia 23
08 Hong Kong 25
09 Conclusion 27
01
APAC CONSTRUCTION FORECAST | 4
— C HA P TER ON E
— CHA P TER T WO
T RE ND # 3
This means owners and investors in commercial property have to rethink their business model,
and tenants are considering optimising floor space to suit a reduced number of on-site staff or
hybrid working approaches. The open-plan office is being reconsidered, and fewer large new
commercial projects are breaking ground. Refurbishments, upgrades and custom fit-outs are
where the most work is likely in the office sector.
Other niche sectors are also rising in prominence, including retirement living, decentralised
commercial and retail property located outside the major cities and logistics facilities to service
the online retail boom.
More Digital Means More Data Centres Green Building Leads the Charge
Data centres are a red-hot asset class, as both owners According to the latest World Green Building Council
growth over the last
and commercial property tenants look to smart building and Dodge Data & Analytics World Green Building few years has been
features and fast, reliable digital infrastructure. Work- Report (WGBR), almost half of the surveyed Australian
from-home and hybrid working models, growing construction firms are now delivering at least 60% of considerable, with total
demand for online education providers, and the rise of
online retailing are also driving a need for more data
their projects as green/sustainable. Australia and New
Zealand are actually ahead of the global curve. The Data Centres real estate
centres. The crunch concerning labour and materials
costs is making budgets challenging. However, this
main drivers are clients seeking buildings that support
occupant health and well-being as well as the belief
capacity growing in the
is not impacting the pipeline of new developments, that green buildings will encourage more sustainable four key countries in
according to Turner & Townsend. business practices.
Asia Pacific but not only.
Singapore is a leader in Asia, with 44% of firms
expecting 60% or more of their projects to be green
The core Tier 1 markets
buildings by 2024. Overall, the WGBC report shows for data centres in Asia
new commercial office projects, institutional projects
and new high-rise residential are the strongest markets Pacific are Tokyo (Japan),
for sustainable building. Social responsibility, occupant
health and well-being, environmental legislation and Singapore, Sydney
regulations are key in shifting the local industry towards
energy-efficient, water-efficient and low-emissions
(Australia) and Hong
buildings. Kong SAR.”
Environmental approaches, digital tools used for
analytics and reporting, and construction quality will CBRE
become strong competitive advantages for construction
businesses.
APAC CONSTRUCTION FORECAST | 10
Green Building
Leads the
Charge 82%
WGBR respondents using metrics to track
green building benefits.
58%
Lower operating costs.
36%
Documentation and certification
33%
Improved occupant health
providing quality assurance. and well-being.
03
APAC CONSTRUCTION FORECAST | 11
— C HA P TER T HR EE
Australia OPPORTUNITY
Experts predict a strong recovery for Australia, with low Residential building
unemployment, strong consumer demand, and around 4.9% growth
in GDP for 2022. Drivers for the optimism include high vaccination Record low-interest rates, state and federal government incentive programs and a structural
rates, relaxing of interstate and international border restrictions undersupply of housing in Australia have made residential building one of the strongest
and reopening of industries affected by lockdowns. Morgan Stanley market sectors. Public projects, particularly state government projects, are also driving activity
notes challenges remain, for instance, supply chain disruptions with projects like schools, quarantine facilities, energy projects, hospitals and transport
and the chronic shortage of skilled labour that was previously met infrastructure.
through targeted immigrant skilled worker visa programs.
—
“Twin booms in house building and infrastructure indicate that the economic recovery will be
led by building and construction, with twin growth trajectories set to add more than 100,000
jobs and to reach $256 billion in 2022,” — Kerry Barwise, ACIF Chief Forecaster and Managing
Director, FTI Consulting.
O B STAC L ES
they can more accurately and Procore shows that rework addressing defects or substandard quality is consuming a substantial
proportion of project time and budgets. The message is clear: Improving quality makes business sense.
factor in the costs of
building products and Digitisation
specialist tradespeople Master Builders Australia has identified that digitisation is essential for small-to-medium construction
businesses to succeed. However, around 80,000 SMEs in the industry have low or no digitisation of
into their quotes.” business processes, limiting their efficiency and opportunities.
Denita Wawn
CEO
Master Builders Australia
04
APAC CONSTRUCTION FORECAST | 15
— C HA P TER F OU R
New Zealand was one of the world leaders in Covid containment, Digital QA, prefab & BIM
and so it led in terms of economic activity up until September
2021, when Delta took hold. While this reduced optimism levels, New Zealand’s Ministry of Business, Industry and Employment has identified three major areas of
economic experts at ANZ Banking Group describe the 2022 opportunity for construction businesses:
outlook as ‘the Great Normalisation’ of living with Covid.
“The recovery is
underpinned by pent-
up demand, higher
employment, continued
strength in building
consents, and the more
permissive COVID-19
Protection Framework
boosting activity at the
start of 2022.”
NZ Treasury
APAC CONSTRUCTION FORECAST | 17
OB S TAC L ES
Forecast
5 68
4 66
3 64
Jun-08 Jun-11 Jun-14 Jun-17 Jun-20 Jun-23 Jun-26
Quarterly
05
APAC CONSTRUCTION FORECAST | 18
— C HA P TER F IV E
Singapore
With one of the world’s highest vaccination rates, the Ministry
of Trade and Industry predicts Singapore will build on positive
economic growth between 3-5% throughout 2022.
OPPO RT U N I T Y
Quality Assurance
The nation has master-planned projects across transport,
residential, mixed-use and tourism that will be providing a
pipeline of work through to 2030. Underpinning new construction
emphasises digital tools and platforms to improve efficiency,
optimise the design and assure quality. The Quality Mark system
enables developers to register and make public the compliance
and standard of their previous, current and planned projects while
incorporating transparent information for potential property buyers.
APAC CONSTRUCTION FORECAST | 19
O BS TAC L E
— C HA P TER SI X
Philippines OPPORTUNITY
The Philippines vaccination rates lag. In addition to the impact Public-Private Partnerships
of the pandemic, it has experienced volcanic eruption and a
devastating typhoon in 2021. Nonetheless, the World Bank does The ‘Build, Build, Build’ initiative has seen infrastructure spending increase as a share of the
expect the economy to continue a slow recovery. An average government budget to support the economic recovery. One of the channels used is Public-Private
growth rate of 5.8% is expected, with public investment in Partnerships. There is a strong and diverse project pipeline currently being assessed by the relevant
construction one of the key drivers for recovery. government departments before deciding to proceed to tender. They include airport expansions, port
expansions, logistics hubs, rail expansion and medical facilities.
O B S TAC L ES
— C HA P TER SEV EN
Malaysia OPPORTUNITY
— C HA P TER EI G HT
The slow yet sustained recovery in 2021 is expected to continue Upgrades & Refurbishments
into 2022, according to economic researchers. The economy is
likely to have a continued low unemployment rate and modest According to Randstad, upgrades and refurbishments are one of the major areas of opportunity in
growth in GDP ranging between 2.8% and 3.8%, largely due to the 2022, with a significant number of property owners expected to seek enhancements to existing
stabilising relationship with China. buildings. Low-interest rates are also predicted to drive high demand for residential property,
particularly at the premium end of the market. New economic and residential hubs in the New
Territories and the new Kowloon CBD are also expected to contribute substantially to economic growth
and demand for construction workers.
O B S TAC L ES
Cost Consciousness
High construction costs, declining productivity, lack of innovation, low safety standards on some sites,
and the construction pipeline’s size have created a significant set of challenges for the Hong Kong
industry. The government is emphasising “cost consciousness” in project management and throughout
the supply chain. It has begun publishing resources to support the industry to lift practice and increase
the delivered value for public funds allocated to projects.
APAC CONSTRUCTION FORECAST | 26
— C HA P TER N IN E
Conclusion
Common themes across APAC markets are labour shortages, high
demand for materials and the potential of digital technology to build
business resilience, improve efficiency and enhance project planning
and supply chain management.
About Procore
Procore Technologies, Inc. (NYSE: PCOR) is a leading provider of construction management software. Over 1 million projects
and more than $1 trillion USD in construction volume have run on Procore’s platform. Procore’s platform connects key project
stakeholders to solutions Procore has built specifically for the construction industry—for the owner, the head contractor,
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and the subcontractor. Procore’s Marketplace has a multitude of partner solutions that integrate seamlessly with Procore’s Procore’s Hub for
platform, giving construction professionals the freedom to connect with what works best for them. Headquartered in Original Content
Carpinteria, California, Procore has offices around the globe. Learn more at Procore.com.
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