Tuesday, 25 January 2011

Recently released market study: Cambodia Infrastructure Report Q1 2011


via CAAI

Fast Market Research recommends "Cambodia Infrastructure Report Q1 2011" from Business Monitor International, now available

PRLog (Press Release) – Jan 24, 2011 – Although Cambodia's infrastructure industry sector has seen remarkable growth in the last decade it still remains underdeveloped. Much of the country has very poor transport and energy infrastructure as a result of historical under investment. Due mainly to base effects, Cambodia's construction industry is forecast to grow by 9.5% (in real terms) in 2010, pushing the nominal industry value to KHR2.59trn (US$640mn). Beyond 2011, we believe that prospects for the Cambodian construction sector are bright. We are forecasting Cambodia's construction sector to average real growth of 9.9% per annum between 2011 and 2015. This forecast is driven by three key factors: our bullish economic outlook for Cambodia, the renewed interest by foreign players (especially China) in investing in Cambodia's infrastructure sector and robust urbanisation levels.

Key developments contributing to forecasts included:

* The Cambodian government has announced plans to promote the development of the tourism sector with an ambitious target of 6mn foreign visitors by 2020. Transport infrastructure will play a key role in meeting this target, and we have seen the Cambodian government speed up the approval of key infrastructure projects. One example is the Siem Reap International Airport. The airport is located near to the iconic Angkor Wat temple complex and the contract for its construction has been awarded to South Korean property developer Lees A&A Co.

* Rural-urban migration continues to be robust: the Cambodian government expects 10,000 new families to move into Phnom Penh each year. The value of housing projects approved by the Cambodian government in Phnom Penh rose by 10% in the first 10 months of 2010, according to figures released by the Ministry of Land Management, Urban Planning and Construction. To cater for this growing urban population, the Cambodian government plans to develop 1.2mn residential properties by 2030, and we expect this plan to provide support for growth in the construction sector over the long term.

* There are signs of renewed interest in Cambodia's infrastructure sector, particularly from China. In November 2010, China and Cambodia signed agreements amounting to US$6.4bn covering projects from infrastructure construction to energy exploration. The deals were signed in Phnom Penh during a state visit by China's top legislator, Wu Bangguo,. In December 2010, China and Cambodia signed another series of agreements during Cambodian Prime Minister Hun Sen's visit to China. Some of the agreements related to the funding and construction of infrastructure such as roads, bridges and power plants. These investments, likely to begin construction in 2011 and 2012, will boost growth in the country's construction sector.

Positive data on consumer price inflation in Cambodia for the first half of the 2010 has added upside to the economic picture for the country. This chimes with our view that the economy enjoyed a pretty sharp bounce in activity in early 2010, further endorsing the upward revision to our real GDP growth forecast to 4.6% (from 3.5%). This is expected to change next year with inflation expected to fall to 4.0% from 2011 onwards.

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