MANILA, Philippines – The construction industry will likely emerge as one of the main drivers of the economy in the next three years due to its strong growth potential, the research arm of Metropolitan Bank & Trust Co. said.
“Given the base and seasonal effects, the construction industry still has a substantial upside potential in the next three years and would be one of the fast movers in the Philippine economy,” Mabellene Reynaldo, research analyst at Metrobank, said in a research note.
“Private construction will still be propped up by steady real estate demand, especially as tight supply in Metro Manila drives growth in other regional hubs,” she added.
“Reconstruction efforts in typhoon-damaged areas will also support both private and public construction values,” the Metrobank analyst further said.
Construction contracted 0.8 percent in the fourth quarter last year, paling in comparison with a 29.9 percent growth seen in the same period in 2012, government data showed.
This dragged last year’s construction growth to only 11.1 percent, slower than the 15.7 percent recorded in 2012.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
“The fourth quarter contraction so far is not indicative of a slowing construction industry,” Reynaldo pointed out.
“A high fourth quarter 2012 base factored in the contraction, and private construction for the first nine months of 2013 was actually strong at 12.6 percent year-on-year,” she noted.
The analyst also added construction work is done during the first half historically due to a wet season experienced by the country during the second semester.
“New construction is generally lower in the second half compared to the first half of the year based on previous data with 2012 as the exception as lesser activity gets accomplished during the wet season,” Reynaldo said.
The Philippine economy expanded 7.2 percent last year, faster than the government’s target of six to seven percent.
The government hopes to grow the economy by 6.5 to 7.5 percent this year.
