Cambodia’s Construction Investments Struggle to Recover as 2024 Sees Significant Drop

• 31 October 2024
• Local News
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Cambodia’s construction sector continues to face a challenging period, with approved investment projects in 2024 falling to about 2,190, valued at under $4 billion, a stark contrast to the nearly 4,841 projects worth approximately $12 billion in 2020. The latest report from the Ministry of Land Management and Urban Planning, presented by CBRE Research on 17 October 2024, indicates that the sector’s recovery remains elusive despite previous growth.

Between 2017 and 2020, Cambodia’s construction industry saw steady growth, peaking in 2020 with 4,841 approved projects, driven by a surge in residential, public infrastructure, and industrial investments. Housing remained the dominant sector, with 2,500 projects, followed by public construction at 750 projects and industrial development with 350 projects. However, a downturn began in 2021, leading to a significant reduction in total projects, reaching around 2,700 in 2021 and further decreasing to 1,500 by 2022. In 2023, the sector saw a slight recovery to approximately 3,207 projects, driven mainly by residential and public investments. Yet, by August 2024, the number had dropped again to 2,190, highlighting that market conditions have not yet stabilized.

Annual Investment Trends

• 2017: The year saw around 2,250 projects, with residential construction dominating the market.
• 2018: A modest rise brought the total to about 2,500 projects, driven by continued growth in housing.
• 2019: An uptick to 4,793 projects marked significant expansion across all sectors.
• 2020: The peak year for the industry, with nearly 5,000 projects, was propelled by robust growth in residential, public, and industrial sectors.
• 2021-2022: The downturn continued, with total projects declining to approximately 2,700 in 2021 and further dropping to 1,500 in 2022.
• 2023: A minor rebound saw projects increase to about 3,207, largely from residential and public investments.
• 2024 (August): A renewed decline to 2,190 projects, indicating persistent challenges in the market.

Resilience in the Housing Sector

The housing sector has shown resilience throughout the downturn, remaining the backbone of Cambodia’s construction investments. In 2024, residential projects accounted for around 77% of approved investments, underscoring the sector’s critical role in sustaining the market. Despite an overall decline, housing has maintained a strong presence, while other areas, such as trade and tourism, have struggled to regain the momentum seen in 2019 and 2020.

Fluctuations in Public and Industrial Projects

Public construction has demonstrated relative stability, with 2024 figures aligning closely with those of 2020 yet surpassing the lower levels recorded from 2021 to 2023. Meanwhile, industrial construction is expected to see a resurgence in 2024, with over 300 projects reported, marking the highest activity in this sector since 2020. Conversely, commercial construction has faced a substantial drop, with under 500 projects in 2024 compared to nearly 1,000 in 2020.

Cambodia’s construction sector has experienced significant shifts, from rapid growth peaking in 2020 to a challenging recovery phase that persists into 2024. The data reflects not only the dominance of the housing sector but also the varying degrees of investment activity across other sectors, suggesting a need for strategic interventions to stimulate a broader market revival.

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