Message from Krishnan Subramanian
“Cost optimisation is a core component of AOQ's regional operating strategy. Investment assurance through cost indexing and digital tools like Hive will help us benchmark, assess, and optimize costs, positioning us better for future opportunities.”
Krishnan Subramanian Regional PMO Lead, AOQ
An economic slowdown in China and global trends towards nearshoring are reshaping the Asian market and opening up new opportunities for emerging economies.
In previous years, the gap in maturity between so-called ‘established’ and ‘emerging’ markets has meant divergent economic and construction trends. Yet, in 2024, Asia is seeing more consistent shifts across the region. China's economic rebalancing, characterised by slower GDP growth, has contributed to this convergence with the forecast for growth in emerging markets and developing economies is revised upward.
In 2025, GDP is projected to slow to 4.5 percent, and to continue to decelerate over the medium term to 3.3 percent by 2029, because of headwinds from aging and slowing productivity growth. On 24 Sep 2024, China announced interest rate cuts and housing market stimulus as part of their plan to boost the economic growth and this is expected to have a positive impact towards the construction sector.
The forecast for growth in India is on the upward trend as high as 7.0 percent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas. India is experiencing robust industrial investment as it emerges as a regional economic leader. While construction costs in India are generally lower than in China, they are increasing at a faster rate. This trend is particularly pronounced in industrial construction, with Bangalore's advanced manufacturing costs surpassing those in Shenzhen.
Malaysia and Indonesia are also witnessing rapid growth in manufacturing. Jakarta's advanced manufacturing construction costs have experienced a significant uptick. Malaysia, in particular, is benefiting from the burgeoning demand for data centers across Asia as companies adopt cloud-based solutions and broadband access expands.
