Boom In Construction Sector Expected
By Azlan Othman

Bandar Seri Begawan - As the Eight National Development programme (8th NDP) and projects under it enters its final period at the end of the year, it is expected to create a boost for the construction industry.

According to the July issue of Brunei Economic Bulletin, published by the Department of Economic Planning and Development, the final implementation of national development projects was in the first quarter of the year.

The significant contribution of the government to economic growth was expected to continue during first quarter of 2006, while concerted efforts continue from the previous quarter in order to expedite implementations and spending.

In the fourth quarter of 2005, loans to the construction sector increased slightly from the third quarter in 2005. This provided funding and added momentum for the private sector to work on both residential and non-residential projects in the first quarter of 2006.

The construction industry registered a strong growth of 8.0 per cent in 2005 after posting a growth of 4.2 per cent in 2004. The boom was driven by constructions of large government buildings, shop complexes and private houses.

However, in nominal terms, the value added in this sector dropped to $418.5 million in 2005 from $422.8 million in 2004. This sector also accounted for 2.6 per cent of the 2005 GDP, a drop from 3.2 per cent of the 2004 GDP.

The Economic Bulletin also revealed that between 2000 and 2005, the second half oil price averages were higher than the first half averages in all but 2001. And in first quarter 2006, the non-oil sector was expected to contribute to output expansion. On its part, the government will contribute to this through efforts to accelerate the implementation of development projects as Q-1 2006 is the final quarter of the 2005/2006 financial year.

Growth in the non-oil private sector will be driven by: both the productive sectors and consumer spending, while oil sector's contribution to growth is expected to be minimal because, as in the previous quarters, oil and gas production increases have been relatively small.

The increase in consumer spending is enhanced by the annual disbursement of government employees' bonus in January. Spending is also expected to be augmented by the Chinese New Year celebration. Both addvigour to the growth of the wholesale and retail trade sector.

This is supplemented by the expected increase in demand for construction materials consistent with the drive to accelerate the implementation of the 8th NDP.-- Courtesy of Borneo Bulletin

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