The pandemic effectively crippled the world economy in 2020, affecting the most lucrative sectors and businesses alike.
While food manufacturing, logistics, telecommunications, and even groceries and essential retail have been able to thrive and stay afloat all year round, the same thing can’t be said for the Property and Construction Industries that were gravely affected that very same year.
Looking into it now, are property and construction industries making a comeback towards a more resilient future?
How the Pandemic Affected the Construction Industry
In the Philippines, the construction industry has always been a major contributor to economic growth.
Construction gross fixed capital formation accounts for nearly P3 trillion in real terms, or 1.8 percentage points of the 6.6% average GDP growth over the past four years.
However, since the pandemic began, the industry saw a 33-per cent contraction in the second quarter due to strict quarantine controls implemented as a preventive measure against the spread of COVID-19.
A year later, construction projects slowly but surely trickled into a massive boom after resuming mid-May last year. Since then, some experts now claim that the property and construction industries are currently driving the country’s economic growth.
How the Construction Industry Bounced Back as a Major Player in Economic Growth
Both property and construction industries are well on their way to make a significant rebound this 2021.
In creating more projects and infrastructures, new jobs generated by the industry for this year will be substantial. Government infrastructure projects in themselves creating 1.7 million direct and indirect jobs.
Besides the benefits one can attain from the construction phase alone, such as job production, infrastructure can create a multiplier effect in the economy. It could potentially create a ripple effect of market activity in the community it is built on. It could pave the way for more mobility and foster new business opportunities.
With all of these factors combined, the construction industry in the country is expected to bounce back in 2021. Forecasts indicate an annual average rate of 8.3 percent from then until 2024, taking its output value up to US$75.1 billion that year, as stated by the data and analytics firm GlobalData in an August 20 note.
Even the Asian Development Bank (ADB) expects the Philippine economy to recover and grow at least 4.5 percent this year and 5.5 percent in 2022.
The firm cited drivers of growth this year. It includes big spending on public infrastructures with large employment multipliers, moderate pick up in household spending, increased export of goods with global recovery, and fiscal policy expansionary by 1.3 percentage points of GDP supported by accommodative monetary policy.
Reasons to Believe: Megawide, The Construction Firm Driving the Country’s Economy by Storm
One firm focusing on public infrastructure projects is the current leading engineering and infrastructure construction firm, Megawide.
Megawide is one of the leading engineering and infrastructure firms in the Philippines today. The company’s dynamic nature and diverse portfolio in Engineering, Procurement, Construction, and Transport-oriented Development, have allowed them to thrive and navigate the pandemic.
Its revolutionary construction and engineering solutions set new standards in the industry. The company has integrated its first-world EPC capabilities with innovative construction technologies. Including precast, formwork systems, concrete batching as well as construction equipment, logistics, and services.
Amidst the ongoing challenges caused by the pandemic, Megawide’s revenue continued to sustain its momentum since the beginning of 2021.
Landport operations of the PTIX contributed P187 million, while revenues from the MCIA reached P115 million.
Last year, Megawide’s construction business contributed P10.8 billion, or 84 percent of total revenues. 2020 ended with 21 live projects, along with negotiations with clients ongoing.
The company also won new contracts in the final quarter of 2020, amounting to P34.8 billion. It ended the year with orders worth P68.4 billion, which is a clear indicator for future revenues.
Noteworthy infrastructure projects from Megawide are the Mactan Cebu International Airport (MCIA) and Paranaque Integrated Terminal Exchange (PITX).
In 2019 – MCIA’s Terminal 2 won a prestigious award at the World Architecture Festival, winning the Completed Building-Transport category against Singapore Jewel Changi Airport, Hong Kong West Kowloon Station, Sydney Australia’s Barangaroo Ferry Wharf, and several other structures.*
In 2020, Megawide won huge infrastructure projects such as the Malolos Clark Railway Project (MCRP) and a 50-year contract in the Carbon Market District.
Despite the challenges from the Pandemic, Megawide and GMR Infrastructure has also completed the construction of the Clark Internation Airport’s new passenger terminal at Pampanga gateway, located about 1000 kilometres north of Manila’s Ninoy Aquino International Airport. With its annual capacity of eight million passengers a year, it can undoubtedly help in decongesting NAIA.
Similar to the development of MCIA, the same inclusive economic benefits have opened in Central Luzon. Unlocking new tourism and business opportunities–and ultimately help in restarting the economy.
What Does the Future Hold?
New Landport locations have been identified and currently in discussion. The need for an organized transport system has become more prominent during the pandemic. This year, Megawide is gearing up to bid for two major railway projects, such as the Metro Manila Subway System and South Line – North-South Commuter Railway projects. Megawide envisions potential Agri-Agra components to cater to wholesalers (“bagsakan” concept) and eventually market in these Landports.
Megawide’s MCIA and Clark International Airport’s new terminal are concrete proof that world-class and transit-oriented development can still be achieved, even amidst a global health crisis.
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