The overall value of the construction industry in 2022 is expected to grow by <\/span><\/strong>4% YOY, reaching 1.42 trillion baht.<\/span><\/strong><\/span><\/p>
- Public construction value <\/strong>continues to expand at 6% YOY, reaching 853 billion baht, supported by the progress of ongoing mega-projects from the past, such as the Orange Line, Pink Line, Yellow Line, Phase 1 of the dual-track railway, the Bang Yai-Kanchanaburi motorway, Suvarnabhumi Airport's third runway, and the Rama 3-Daokanong expressway contracts 1 and 3, as well as the commencement of new mega-projects, particularly the Southern Purple Line, Western Orange Line, Northern dual-track railway, and Eastern railway, along with various motorways and expressways.<\/span><\/li>
- Private construction value <\/strong>is expected to grow slightly by 1% YOY to 567 billion baht, driven by the recovery of residential construction values in line with the resurgence of new housing units. However, the value of commercial real estate construction, particularly office buildings, is expected to contract slightly, while retail space is anticipated to grow due to ongoing large-scale project constructions.<\/span><\/li>
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However, in 2022, construction operators face challenges from rising construction costs, including labor and material costs, particularly steel and cement.<\/span><\/strong><\/span><\/p>
- Construction operators are facing a labor shortage, as the number of foreign workers in the construction sector has decreased since the COVID-19 pandemic and has not returned to pre-pandemic levels.<\/span><\/li>
- Construction material prices have surged along with energy prices, especially steel and cement, due to the impact of the conflict between Russia and Ukraine.<\/span><\/li>
- Different groups of construction operators are affected to varying degrees. Medium-impact groups include public construction contractors with adjustable price contracts, who will receive compensation through K calculations, and private construction contractors who have contracts where the client supplies materials. In contrast, high-impact groups include public construction contractors without adjustable price contracts, who will not receive compensation from K calculations, and private contractors who supply their own materials.<\/span><\/li>
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For construction material usage in 2022, growth is expected despite challenges from rising prices driven by increasing energy costs.<\/span><\/strong><\/span><\/p>
- Steel <\/strong>: Consumption of long and flat steel in 2022 is expected to be 6.6 million tons (+3% YOY) and 12.9 million tons (+5% YOY), respectively, supported by the expansion of the construction sector, automotive production, and other products that use steel as a component. Meanwhile, the prices of long and flat steel in Thailand in 2022 are expected to rise to 30.2 baht/kg (+19% YOY) and 36.3 baht/kg (+15% YOY), respectively.<\/span><\/li>
- Cement <\/strong>: Domestic cement consumption in 2022 is expected to grow by 2% YOY to 35.1 million tons, driven by public construction expansion, while private construction is expected to grow slightly. Additionally, cement and clinker exports are expected to recover by 5% YOY to 12.4 million tons, reflecting the recovery of the economies of key trading partners. The price of cement in 2022 is expected to rise by 8% YOY to 1,753 baht/ton.<\/span><\/li>
- Tiles <\/strong>: Consumption of floor and wall tiles in Thailand in 2022 is expected to increase slightly by 1% YOY to 227 million square meters, benefiting from private construction expansion, new housing projects, and commercial real estate, as well as building and residential repairs. However, tile imports may slow down due to a weaker baht and increased shipping costs, reflecting opportunities for domestic tile manufacturers to increase production capacity.<\/span><\/li>
- Paint <\/strong>: The market value of building paint in 2022 is expected to grow slightly by 2% YOY to 19 billion baht, benefiting from slight expansion in private construction and building and residential repairs. However, rising energy prices mean that producers still face higher raw material costs for pigments, impacting profit margins for operators.<\/span><\/li>
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EIC believes that construction and building materials operators may adjust strategies to cope with rising costs as follows:<\/span><\/strong><\/span><\/p>
