Market Monitor Construction Thailand 2018

Marknadsrapporter

  • Thailand
  • Construction

13 Feb 2018

Construction is expected to have high growth rates over the next five years, mainly due to large infrastructure projects driven by the government.

  • Construction accounts for about 8% of Thailand´s GDP, with the public sector accounting for about 60% of activity. There are about 80,000 construction companies registered in Thailand, of which 1% qualify as large-scale operators, holding 75% of market share. The sector is expected to have high growth rates over the next five years, mainly due to large infrastructure projects driven by the government.
  • Due to lower construction material prices (e.g. low steel prices caused by oversupply from China) businesses profit margins have improved in 2017. However, as China is reducing its steel production steel prices are expected to increase again in the coming years. Higher input prices could pose a risk for smaller players, which are more exposed to construction work demand volatility and price-cutting by large operators, affecting their payment capability.
  • Payment duration in the industry is 90-120 days on average, depending on the size of individual projects. Payment experience has been average over the past two years, with a slight increase in non-payment notifications in 2017, mainly caused by smaller players.
  • Our underwriting stance is generally open for commercial construction (due to a strengthening economy) and public construction (due to high demand and progress of government-sponsored mega-projects). However, our underwriting is more restrictive for businesses active in residential construction, as there are indications of oversupply in the low-to-medium price residential building segment.
  • In all subsectors we are more selective with small and medium-sized construction businesses, as many of them are highly geared and dependent on bank financing, while financing conditions like covenants are quite tight for them. The assets of smaller players are often limited, which hampers their ability to undertake larger projects.

Relaterade dokument

Ansvarsfriskrivning

De uppgifter som lämnas här tillhandahålls endast i informationssyfte och bör inte läggas till grund för några beslut. Försäkringsvillkoren återfinns i försäkringsbrevet eller i avtalet om köp av produkter eller tjänster. Ingenting i detta dokument ska tolkas som att Atradius har några rättigheter eller skyldigheter, till exempel skyldighet att genomföra due diligence-undersökningar av köpare eller för er räkning. Om Atradius genomför due diligence-undersökningar av kunder gör vi det som en del av vår bedömningsprocess och inte för den försäkrades eller någon annan persons räkning. Atradius och dess närstående företag, dotterföretag eller intresseföretag har heller inte under några omständigheter något ansvar för direkta, indirekta, särskilda eller oavsiktliga skador eller följdskador som uppstår till följd av informationen i detta dokument.