Construction sector seen to rebound from 26% slump in 2020


The local construction industry is poised for a modest rebound this year as the government ramps up its major infrastructure projects and with sustained support for small and medium contractors who were the most affected by the global pandemic, an industry group said Monday.

This is the outlook of the Philippine Constructors Association which groups not just the highest-rated construction companies in the country but also small and medium enterprises and suppliers through its chapters and affiliates nationwide.

PCA president Wilfredo Decena said the construction sector would contribute strongly to the recovery of the domestic economy this year after slumping 26 percent last year, sending the national gross domestic product to a steep 9.5-percent year-on-year drop.

Fitch Solutions recently upgraded its growth forecast for the Philippine construction sector to 9.5 percent this year, near its average 10-percent annual growth before the COVID-19 crisis that battered economies around the world in 2020.

Decena said the timely public spending on infrastructure would boost the industry despite soft private construction investments as the national government has allocated a sizeable P1.1 trillion of the P4.5-trillion national budget this year for infrastructure projects.

“We are hearing of contractors, particularly the small and medium companies, being unable to close any projects at this time. Public investments need to fill the gap until investor confidence is restored,” he said during the recently-held PCA regular membership meeting.

As part of the ten-point industry trends and challenges discussed during the meeting, Decena called for the prompt payment of contractors, especially the SMEs, as they were already absorbing extraordinary costs related to COVID-19.

The PCA said there’s a need to rethink the supply chain conditions and address the cause of spiraling costs of materials. There are sectors that were pushing for the unrestricted entry of foreign contractors that could further displace Filipino contractors, particularly SMEs which comprised 97 percent of all registered contractors in the country.

“This is happening while other countries have taken steps to protect and support their local industry amid the global pandemic,” Decena said.

He said the current quarantine conditions exacerbated the shortage of skilled labor force and skills mismatch.  As part of its thrust for the year, PCA is further expanding its knowledge and skills development program nationwide.

PCA reminded members to be prepared to continue complying with evolving health and safety protocols to make construction sites virus-free.

Also identified among the top trends in the construction industry this year are the acceleration of digitization and other emerging technologies to increase efficiency and productivity, and the move towards sustainable infrastructure which is not just green but also resilient.

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