BMI View: A gradually brightening investment outlook bodes well for foreign investing into Cambodia's infrastructure sector, despite structural weaknesses such as land disputes and regional competition dampening growth. A regional drive to improve connectivity with Asia, as well as a more stable political climate will boost the business environment in the country.
Forecast And Latest Updates
Construction industry's real growth (y-o-y) came in at an estimated 7.8% in 2015 and we expect the expansion pace to accelerate to 9.9% in 2016 and 9.8 in 2017. We believe the sector will maintain similar growth rate across the entire review period, averaging 9.5% per annum between 2016 and 2025.
We hold our view the country's underdeveloped infrastructure sector will benefit from the regional drive to invest in Cambodia, rising tourist arrivals and robust economic growth.
Political instability and land disputes remain the most prominent risks hindering investment in the sector.
In late 2015 Cambodian firm Global CAM Project Development and Korea's Green Eco Energy entered a memorandum of understanding (MoU) to develop the Phnom Penh-Sihanoukville road project in Cambodia. The deal is reportedly worth up to USD536mn. The public-private partnership project involves building a 275km long, 20m wide expressway, running along the National Road 3.
We believe biomass energy is viable in Cambodia as electricity in the country is costly and it has an abundance of feedstock. However, hydropower will continue to be the key driver of growth in the Cambodian power sector.
According to a report issued by the country's Ministry of Land Management, Urban Planning and Construction, the total value of the approved construction projects in Cambodia in 2015 grew to USD3.33bn, which marked a 33% y-o-y increase. There were more than 2,300 confirmed projects, totalling up to 7.7mn sq m (Property Report).
|e/f = BMI estimate/forecast. Source: Asian Development Bank, National Institute of Statistics, BMI|
|Construction industry value, KHRbn||5,522.38||6,275.67||7,125.06||8,062.72||9,111.99||10,293.10||11,622.62|
|Construction Industry Value, Real Growth, % y-o-y||7.80||9.89||9.78||9.41||9.26||9.21||9.17|
|Construction Industry Value, % of GDP||7.6||7.8||8.0||8.2||8.4||8.6||8.8|
Cambodia's RRI score decreased by 0.2 points to 33.4 in Q216. The country comes in 16 th among 17 assessed markets in the Asia Pacific region.
The country suffers from pervasive corruption, as illustrated by Transparency International's Corruption Perceptions Index for 2015, placing Cambodia at 150 th place out of 167 countries.
Increase in investments from China and Japan could pose upside risk to the country's Rewards score.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Cambodia Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Cambodia Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Cambodian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Cambodia to test other views - a key input for successful budgetary and planning in the Cambodian infrastructure market.
- Target business opportunities and risks in the Cambodian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Cambodia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.