Asia Pacific is the world’s largest construction market. Buoyed by rapid growth in rising per capita income alongside increasing urbanization throughout the region, the construction industry has enjoyed decent health and has continued to grow at a steady rate of between 4 percent and 5 percent per year.
Research from Price Waterhouse Coopers predicts that growth of around 4 percent will continue through to 2020, with the main areas for development being infrastructure projects in emerging economies in the region and commercial properties in the more established markets like Hong Kong, Singapore, Australia, Korea and Japan.
In my own region of ASEAN, construction projects are gaining momentum across residential, industrial and infrastructure areas. Governments are pushing for a slight bias towards infrastructure projects, to help their economies become more sustainable, and almost all ASEAN nations are likely to increase budgets for infrastructure over the next five years.
This commitment to infrastructure looks set to trigger an increase in infrastructure development for the building and construction industry in the region.
To give a few examples, Thailand has put in place an infrastructure plan for the period 2016 to 2020, and aims to spend $58.5 billion on new infrastructure projects by 2025. Myanmar’s political and social transformation continues apace, with the country recently opening up to foreign investment in its construction industry. The sector is forecast to experience rapid growth, at a CAGR of 10.37 percent, with market value increasing from the current $8.2 billion to $13.5 billion by 2020. The Myanmar government has also committed $26.8 billion to new road, rail, water and air transportation projects under its National Transport Master Plan.
Vietnam is also committed to improving infrastructure, with its construction industry is forecast to grow by 6.3 percent in 2017 and 6.1 percent in 2018. Malaysia is expected to have $22 billion worth of new infrastructure contracts awarded over 2017 and 2018, driving strong construction industry growth towards a CAGR of 9 percent in 2018, with the government focusing expenditure on public infrastructure and residential housing. Indonesia’s infrastructure spending is expected to exceed $165 billion by 2025, while the Philippines government is also planning $160 billion of infrastructure spending over the next 6 years. The list goes on.
Where does technology come in?
All these new projects and the need for greater urbanization and infrastructure throughout the ASEAN region are well-timed. New technologies like Building Information Modeling (BIM) and the Internet of Things (IoT) provide insight and tools to more efficiently plan, design, construct, and manage new buildings and infrastructure.
The idea of the “building of the future” has been around for some time now, but today digital technologies are helping make the stuff of science fiction movies a reality. BIM enables construction companies to gather together all the information about a building, about each and every component, in one place, and use it to drive efficiencies. It lets construction companies use new kinds of digital planning and control technology to maximize resources on a project, while also anticipating any potential problems or project clashes along the way, helping with workflow and also energy efficiency targets.
In short, BIM streamlines everything for construction companies and makes development smoother. Where previously they may have used numerous technologies on various stages of a project, now BIM lets them have more central, granular control and visibility in real-time – reducing the risk of mistakes and unnecessary costs.
The importance of IoT
Internet of Things (IoT) technology is able to offer big potential benefits to ASEAN’s construction sector too. Smart buildings are now a reality and can help construction companies achieve their goals when it comes to regulatory compliance, cost management and, significantly, making buildings more attractive to potential tenants.
IoT solutions and apps can deliver on energy efficiency targets using sensors throughout the building married to data analytics, for example. Machine learning and predictive analytics tools are powering new automated systems that deliver further efficiencies. As a destination for a lot of outsourcing by multinational corporations (MNC), it is in ASEAN’s interests to make its properties as attractive as possible.
The future is bright – and smart
With Asia being the largest construction market on the planet and a region of technology pioneers, it makes sense that BIM and smart building solutions should flourish here. Smart city projects already exist in Singapore and initiatives are underway in Philippines, Thailand, and Vietnam. BIM and IoT solutions will be intrinsic to those. In a competitive marketplace, where costs and operational efficiency are arguably the two main drivers to the success of a construction project, BIM and smart building solutions are only set to grow in ASEAN.
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To read more about how construction companies can use digital technologies to innovate and stay competitive, please read a new PwC white paper, “Building smart: How digital technology can help construction companies achieve more value”: http://www.orange-business.com/en/library/white-paper/building-smart