The domestic construction material business has recorded stellar growth over the past 2-3 years, thanks to a growing number of state and private construction projects. Of all the projects built during that period, 34 percent were in the Greater Bangkok metropolis alone. However, due to economic growth across various regions over the past 4-5 years, construction material suppliers and real estate developers have expanded their investments in major and secondary provinces, plus those along the border to benefit from the infrastructure development of neighboring nations.
Economic growth and urbanization, along with increased investments into basic infrastructure, plus housing projects and business centers in many provinces, have not only given rise to more local construction material retailers, but also induced many suppliers – that operates businesses under the modern trade concept – to expand upcountry, as well. This has forced local retailers to adjust their business strategies to cope with rising competition.
We at KResearch expect that the construction material market will benefit significantly from booming construction business that will likely see investments rising 7.5-9.5 percent YoY to perhaps THB0.9975-THB1.00 trillion in value during 2013, albeit somewhat lower than the 12.8 percent growth recorded for 2012. Rapid urbanization and infrastructure development in Laos, Myanmar and Cambodia should help increase demand for Thai construction materials from consumers and building contractors in those countries. Thai construction materials are widely accepted there because of the quality, product choice and service.
Given this, KResearch expects that turnover within the Thai construction material market will reach perhaps THB590-601 billion in 2013, rising 6.9-8.9 percent YoY, albeit lower than the 10 percent growth achieved in 2012. Of that value, THB356-363 billion will go to upcountry projects, especially the northeastern region, where large investments have been undertaken toward diverse construction projects.
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