BMI View: We expect growth in Taiwan's construction sector to pick up beyond 2015, supported by expansionary spending policies, a focus on developing the country's transport network and a rebalancing of the power sector. The presidential elections in 2016 pose the most significant downside risk to our outlook.
Forecast And Latest Updates
Taiwan's construction industry contracted 1% y-o-y in 2015. We forecast the industry to return to growth and register 1.3% y-o-y expansion in 2016, supported by expansionary expenditure and monetary policies.
We hold our view Taiwan's export-orientated manufacturing sector will continue to face headwinds due to the ongoing slowdown in China and reduced global demand for tech products. These factors will weigh on the non-residential buildings segment.
Over our forecast 10-year period, we expect Taiwan's construction industry to average 3.5% growth per annum. We believe construction activity will be supported by favourable government policies, continued focus on developing the country's transport network and a rebalancing of the power sector.
We expect a weakening of the property market in 2016, given the government has implemented a capital gains tax (effective January 1 2016) with a top rate of 45.0% to curb property market speculation and surging real estate prices.
We believe DPP's landslide victory in the presidential and parliamentary elections in January 2016 will have a significant impact on Taiwan's energy sector. President-elect Tsai Ing-wen's commitment to phasing out nuclear by 2025, combined with the already widespread anti-nuclear sentiment in Taiwan, will weigh on the nuclear sector. Increased support for renewable energy and strengthening project pipeline for coal and gas plants means the government's focus is increasingly shifting to alternative power sources to fill the gap from reduced nuclear output.
|e/f = BMI forecast. Source: National Statistics Bureau, BMI|
|Construction industry value, TWDbn||419.95||428.35||451.38||478.05||506.64||536.33||567.20|
|Construction Industry Value, Real Growth, % y-o-y||-1.03||1.25||3.58||3.91||3.98||3.86||3.76|
|Construction Industry Value, % of GDP||2.6||2.6||2.6||2.6||2.6||2.6||2.6|
Taiwan fell from 10 th to 12 th position in our latest Asia Pacific RRI, largely on account of stagnant construction industry growth rates in 2015.
Economic headwinds and political uncertainty following the elections in January 2016 could weigh on the country's industry reward score over coming quarters.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Taiwan 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 Taiwan Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Taiwanese infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Taiwan to test other views - a key input for successful budgetary and planning in the Taiwanese infrastructure market.
- Target business opportunities and risks in the Taiwanese infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Taiwan.
- 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.