BMI View: Continued export woes and the release of the soil liquefaction map will weigh on the outlook for Taiwan's construction sector. However, continued government investment in the transport and infrastructure sector will provide some support.
Latest Updates & Industry Developments
With the central bank in full monetary easing mode and a return to political stability in H216, we maintain our forecast for Taiwan's construction industry to grow by 1.8% y-o-y in 2016.
The release of the soil liquefaction map following a deadly 6.4 magnitude earthquake in February will present headwinds to the residential sector amid concerns over the structural integrity of the buildings.
We forecast the country's transport infrastructure sector to grow by 5.0% in 2016 due to continued government investment in the sector. With the new government affirming its commitment to developing the transport system, we believe the sector is set to maintain stable growth (averaging 3.3% over the next decade).
While President Tsai Ing-wen's commitment to phase out nuclear by 2025 will likely gain the support of the population, we note that efforts to do so will face headwinds as it would require developing alternative sources of energy as well as increasing Taiwan's energy efficiency. With the country suffering from periodic electricity shortages from conventional sources, we maintain our expectations for the government to increase its investment in renewable energy and strengthen investment in coal and gas plants.
Challenging economic conditions will see the industry continue to grow at a slow pace in 2016 as the residential and non-residential sector faces continued headwinds. However, we expect growth to remain steady over the longer term (averaging 3.7% over the next decade).
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Construction industry value, TWDbn||419.95||428.35||443.74||459.53||476.45||499.31||525.75|
|Construction Industry Value, Real Growth, % y-o-y||-1.03||1.82||1.79||1.56||1.68||2.80||3.30|
|Construction Industry Value, % of GDP||2.5||2.5||2.5||2.5||2.5||2.4||2.4|
A challenging housing market outlook has led Taiwan to maintain its 12th position in our latest Asia Pacific Risk Reward Index.
We see downside risks to the country's industry reward score over the coming quarters due to persistent export headwinds and considerably cooler cross-Strait ties.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
|e/f = BMI estimate/forecast. Source: National sources, BMI|
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.