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25 Mar 2021

Real Estate and Construction

Sales of construction materials stores to grow by 0.2%-1.9% in 2021, boosted by public construction spending (Current Issue No.3201)


KResearch projects that sales of construction materials stores may improve slightly from the previous year, by approximately 0.2-1.9 percent in 2021, or an estimated market value of THB 803-817 billion. These figures are predominantly supported by the Thai government's continuous investment in construction projects, which could grow by 3.3-4.7 percent. This growth compensates for the slowdown in the private sector's investment in property projects which may contract by around 6 to 3.8 percent. Wholesalers and distributors are expected to perform better than other operators in the construction material sector as their customer base is related to projects funded by the government and large private companies. Bright prospect is also seen for modern trade retailers seeking to increase their sales volume through both offline and online channels.

Despite a general slackening of private investment in the construction industry – particularly in real estate– low-rise housing projects can expect to see steady investment in 2021, thanks to strong domestic demand from consumers who want to buy units to live. Products that will likely benefit from such market trends include cement, steel, pre-cast concrete structures, and interior decor like tiles, sanitary ware and furniture.

Going forward, construction material manufacturers will increasingly gravitate towards selling products directly to consumers via online channels, without being represented by dealers. This trend can be inferred from significant growth in sales and investment figures among large retailers. Taking into account the Thai context, purchases via dealers will remain the main sales channel.

In terms of future trends, the type of construction materials to become increasingly available in the market would be eco-friendly products, since the younger generations of consumers have grown ever more aware of issues related to global warming and air pollution. Moreover, China and several European countries have already begun to embrace these green construction materials. New laws and standards are constantly being proposed and enacted to regulate CO2 emissions.​

Real Estate and Construction