The construction ministry greenlit 3,407 construction projects in January-October 2022 with total registered capital of $2.190 billion – down by 191 developments and 57.2 per cent in terms of value over the same time last year, according to the finance ministry.

Of these, 3,018 or 88.58 per cent were residential projects, down from 3,109 in the same 10-month period last year, the Ministry of Economy and Finance said in its October 2022 Socio-Economic Trends report, which categorised the projects as: residential, commercial, industrial, tourism, public, and other investment.

Using previous data from the Ministry of Land Management, Urban Planning and Construction for reference, it can be seen that in September-October alone, the ministry gave the nod to 596 projects with total registered capital of $0.53 billion – down by 101 developments and nearly three-fifths in terms of value over the same time last year. Of these, 497 or 83.39 per cent were residential projects, down from 579 in the same two-month period last year.

“Cambodia’s economy is expected to continue to grow in 2022, supported by the positive global [demand, despite] the impacts of the Russian-Ukrainian war. The high vaccination rate and [the] reopening the country has [allowed] the country’s economy to return to normal,” the finance ministry report said.

“With the current momentum of the recent recovery of economic activities, the perspectives on the Cambodian economy [are] showing positive signs, especially on the production line, which reflects the continuous growth in industrial production, garments, and non-garment exports,” it added.

Housing Development Association of Cambodia secretary-general Huy Vanna told The Post that construction project applications remain subdued, considering the extent that Covid-19-related travel restrictions have been relaxed globally.

And Vanna expects this downturn to continue in the near term, reasoning that construction industry indicators do not fluctuate as much as those of other economic domains, pointing out that some developments can take longer than five years to complete.

The construction sector can only stage a meaningful rebound with stable and robust global economic growth, he claimed, adding that even then, recovery momentum would not likely materialise immediately.

Worse still, although Covid-19 concerns have by and large subsided, the Russo-Ukrainian conflict, coupled with a raft of other geopolitical tug-o-wars, now significantly weighs on global economic growth, he said.

“The continued decline in the number of projects and investment in the construction sector is not only occurring in Cambodia, but also in almost every country in the world. When global economic growth is uncertain, demand for consumption and capital investment disbursement are low,” Vanna said.

He confirmed that virtually no construction work is being carried out on newly-approved projects, and underscored that poor sales of units at several completed residential developments are preventing new investments in the segment.

Cambodia Constructors Association general manager and secretary Chiv Sivpheng affirmed that construction activities have picked up year-to-date, but confirmed Vanna’s remarks that the great majority of work is being done on older projects.

Sivpheng attributed the drop in applications and approvals of construction projects to global economic instability, which he said has led investors to put off throwing more money into the sector.

However, with the continued investment growth seen across a range of domains, the Cambodian construction sector will eventually mount a successful comeback, “but it will take more time”, he said.

“Government-led development of new infrastructure is also part of the drive to boost the construction sector,” Sivpheng added.

The construction ministry reported that it approved 4,303 projects nationwide in 2021, representing a floor area of 12.998 million square metres, and registered capital of $5.334 billion, down 31.21 per cent from $7.75 billion in 2020.