Supporting the re-emergence of the construction industry in the Asia Pacific region
Like all parts of the world, construction in the Asia Pacific (APAC) region has been affected by the Covid-19 pandemic. However, there are signs of growth in this exciting and innovative market, and it’s our job as claims consultants to respond to its needs as it re-emerges.
How Covid-19 has affected the market
KHL reported that according to data from The World Bank, growth in the APAC region is projected to fall to 0.5% in 2020, the lowest rate since 1967. China’s growth is expected to slow to 1% this year, but then rebound to 6.9% in 2021 as activity gradually normalises. Meanwhile, economic activity in the rest of East Asia and Pacific is forecast to contract by 1.2% in 2020 before rebounding to 5.4% growth in 2021.
The re-emerging construction industry
However, a report from Research and Markets has shown that the Asia Pacific construction industry is expected to record a CAGR of 10.1% to reach USD 4682.2 billion by 2024. It expects growth across residential, commercial, industrial, and institutional sectors, with short term challenges being mitigated by government spending in the infrastructure sector, and a distinctly positive outlook for the medium and long term.
For example, data and analytics firm GlobalData has said that “investments in real estate development have grown, increasing by 7% year-over-year in April. This is significant, following marginal growth of 1.1% in March and a 16.3% contraction during the first two months of 2020.” (Report on KHL).
They added: “China has resumed construction on just under 90% of key projects, according to an official with the National Development and Reform Commission (NDRC). All major railway projects have resumed operation, with 97% of major highway and waterway projects and 87% of airport projects also resuming construction.”
Exceptional talent and innovation
It is no surprise to many claims consultants and those in the construction industry in, that this part of the world is already showing green shoots of life. Less than a year since its almost completely ground to a halt, and the innovation, drive and skill that we know to be characteristic of the APAC construction market has shown its determination and resilience.
Having worked in the Asia Pacific Region for many years, we have come to know it as the cream of the crop when it comes to talent. Our teams are at the forefront of project management solutions for construction projects, and they are perhaps the most effective in all the world at implementing policies of prevention and early resolution when it comes to claims.
Claims consultants for the modern construction industry
As in all regions, the construction industry has been changing in recent years, but those changes have been escalated in 2020. One of the fundamental requirements to being able to move forward is the ability to have confidence in a project’s success from the start – something that’s hard to do with increased risk and tighter budgets. We know that the average project has numerous claims notices issued over the course of the construction period. It is the nature of a job built (literally) on many moving parts and dependent on the intersection of many people, management styles, communication styles and schedules. It’s unrealistic to simply hope for the best – we all know what they say about best laid plans.
Therefore, it’s imperative that all parties involved in a construction project, not only have access to capital for the project itself, but also have two other things to enable them to pursue projects properly, effectively, professionally and with confidence:
Access to capital when things don’t go to plan and disputes arise so that they can be solved efficiently, effectively, hopefully amicably and without impacting the bottom line of the project.
Strong project management on existing projects to help prevent issues arising in the first place.
We have always seen it as our duty to support the construction industry in the most positive ways possible. We help clients to view claims not as a disaster, but a reality that’s best faced before they arise, so that they can be resolved with minimal or no animosity. For this reason, we have one of the most effective project management solutions in the industry available via our teams in South East Asia and the Pacific Rim. It’s also why we developed our claims funding initiative – a first in the construction industry. We have also partnered with some of the best minds in the world – such as BK Asia Pacific – in order to make it readily available in different regions with the support of local claims consultant expertise.