Lull in sales of diggers, tractors points to long property slump
SALES of construction machinery have plummeted as much as 80 percent following the global economic crisis, company managers said Tuesday, indicating that a lull in property and real estate has yet to abate.
“With the property market boom in 2007 and mid-2008, customers came to buy construction machinery at my shop to clear land for sale,” said Ly Huy, general manager of Chang Fa Co Ltd, which sells Chinese equipment from a large lot in Chroy Changvar commmune in Russey Keo district. “At that time, I could sell around 50 machines. But now, I only sell two to three machines per month.”
Standing in a lot half-full of excavators, road graders and tractors, Ly Huy is not alone: The economic slowdown quelled wide growth in real estate and property markets, resulting in the cancellation of projects across the capital.
“Our business is still not running well,” said Chhun Bunkea, sales manager for Multico MS Cambodia Co Ltd, which imports equipment from Japan. “Last year, I could sell about seven or eight machines a month. But this year, I can sell only one or two machines.”
Chhun Bunkea said he didn’t expect his luck to improve this year, but that he hopes business will improve in 2011.
“It’s not only my company’s sales that have dropped,” he said. “Many sellers of construction machinery next to my shop have also dropped [sales]. They complain that the financial crisis hit the construction sector in the Kingdom.”
Chea Sokha, director of Sokha Pounding Construction Co Ltd, said Tuesday that since the real estate decline his business had fallen 80 percent.
Prior to the downturn, he was hired for several home-construction projects each month. Now he gets about one a month, too little to pay for office rent and staff, he said.
“Most construction companies can get jobs from road-construction projects only,” he said. “Construction for home-development projects is very quiet.”
Lao Tip Seiha, director of the Department of Construction at the Ministry of Land Management, Urban Planning and Construction, said Tuesday that even amid the slowdown, the number of construction firms licenced by the government had grown from 112 in 2008 to 128 in 2009. Since 2000, Cambodia has licenced 819 construction companies, 166 of them foreign, he added.