Basic Construction Material Imports Drop as Some Large Development Projects on Hold

• 17 December 2020
• Local News
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As of September 2020, steel and cement imports continued to sharply decline, contracting by 41.4% and 38.1% year-on-year, respectively. This drop is because some large development projects, especially high-rise commercial and residential buildings, were put on hold, according to a recent report by the World Bank.

The report entitled Cambodia Economic Update: Restrained Recovery published in November also stated that in the first six months of 2020, the value of steel and cement imports also decreased by 45.1% and 8.3% year-on-year.

The report added that the construction activity has remained weak since the first half of 2020. The value of approved construction permits also declined by 9.3% in the first nine months of 2020, compared to the same period in 2019. This somehow reflects the downward trend of the investment appetite as the property market faced overinvestment and excess supply from the pre-crisis boom.

According to the World Bank’s prediction, the subdued construction and real estate activity might drag down the real growth in the short term, as the two sectors have been the largest engines of growth in recent years.

The World Bank also projected that Cambodia’s economic growth will contract by 2% in 2020, but up 4% in 2021. However, a prolonged construction and real estate boom still presents economic vulnerabilities. (Read more)

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