Market Trends of thailand construction chemicals Industry
Rising foreign direct investments (FDI) and tourism will boost the sector's growth
- In 2022, Thailand's commercial construction sector experienced a 20% surge in volume compared to 2021, marking a recovery from the COVID-19 pandemic. This rebound also contributed to a 2.6% rise in the country's GDP. In 2023, the commercial construction sector experienced further growth, with a volume increase of 3 million sq. f. This expansion is primarily driven by a surge in foreign direct investments (FDI), which is leading to higher demand for additional office spaces, warehouses, and retail outlets nationwide.
- From 2018 to 2021, the new floor area in Thailand's commercial construction sector witnessed a 2.82% decline. This dip was a direct consequence of the pandemic, which led to a reduced demand for commercial spaces like offices and retail outlets. The years 2020 and 2021 were particularly challenging, with a significant drop of 31.33% and 15.17%, respectively, in the new floor area compared to 2019. The pandemic-induced restrictions, such as travel limitations and supply chain disruptions, further exacerbated the situation, leading to labor shortages and material scarcities.
- The demand for commercial spaces in Thailand is on the rise, bolstered by a surge in tourism and a 36% growth in foreign direct investments (FDI) in 2022 compared to the previous year. This uptick in FDI signals a growing interest from companies overseas in establishing their operations in Thailand. This is further fueling the demand for office spaces. During the forecast period, the commercial construction sector is projected to witness a steady growth in the new floor area, with a compound annual growth rate (CAGR) of 4.52%.
Understand The Key Trends Shaping This Market
Download PDF
Housing schemes such as the National Housing Authority (NHA) and Krung Thai Bank (KTB) will boost Thailand's residential sector
- Thailand, a highly urbanized nation in Southeast Asia, boasts a robust residential construction sector. In 2022, the sector witnessed a notable upswing, with a 14.24% increase in new floor area compared to the prior year. In 2023, the residential sector growth continued and surpassed the 2022 figures by nearly 1 million sq. f. This positive trajectory is underpinned by the country's stable economy and a gradual uptick in per capita income.
- The residential construction sector faced a significant setback in 2020, grappling with the repercussions of the COVID-19 pandemic. The ensuing economic downturn, coupled with travel restrictions and job losses, led to an 11% dip in residential construction volume from 2019. However, in 2021, the sector rebounded impressively, witnessing a 13% surge in volume. This resurgence can be attributed to the waning impact of the pandemic and strategic government measures, such as maintaining a record-low policy interest rate of 0.5% throughout the year by the Bank of Thailand. These initiatives bolstered buyer confidence, fueling demand for new residential properties.
- During the forecast period, Thailand's residential construction new floor area is projected to grow, registering a CAGR of 4.25%. This growth can be attributed to several factors, including a rising GDP per capita (expected to grow by 2.8% in 2023 and 3.2% in 2024), rapid urbanization, increased foreign investments, and proactive housing schemes. Notably, the National Housing Authority (NHA) and Krung Thai Bank (KTB) offer incentives to property developers, encouraging the construction of affordable homes for low-income earners.
Understand The Key Trends Shaping This Market
Download PDF
OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Thailand's industrial sector's growth will have a major influence on the construction activity in the industrial and institutional sector
- The Thai government's growing focus on land, air, and sea infrastructure development will lead to the infrastructure sector’s growth in the future
