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26 Oct 2022

Thai Economy

Public construction investment to grow in 2022-2023 bolstered by megaprojects, but close attention must be paid to several risk factors (Current Issue No.3353)


        The investment value of public construction projects is expected to see ongoing growth during the remainder of 2022 and into 2023. The improvement can be attributed to a low base in the same period of the previous year, resumed construction of ongoing projects that were suspended and delayed during the COVID-19 pandemic and newly bid projects that will start construction in 2023.

        Given this, KResearch projects that the overall value of public construction in 2023 may reach THB 840-850 billion, growing 2.5-3.5 percent YoY, compared to a low-base estimated growth of 1.7 percent for 2022. The 2023 investments will be driven chiefly by megaprojects, especially the Eastern Economic Corridor (EEC) program, the first phase of the Thailand-China high-speed train project, and the Mass Rapid Transit South Purple Line project.

        However, cost management is a challenge for the industry. As evidenced, construction material costs remain higher than pre-pandemic levels; labor costs are rising due to the minimum wage hikes over the past two years; and funding costs are increasing in response to the Monetary Policy Committee (MPC)’s tightening monetary policy. Another issue is preparation for possible flooding that may cause damage to construction sites and delay work in some areas.

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