Abstract
In light of the intensification of the financial crisis in developed markets
(and beyond), BMI has revised
downwards our forecast for real growth in
Taiwan' s construction sector next year. With a recession
having become a
virtual certainty and unemployment on the rise, the government will in all
probability
try to expedite the implementation of its planned TWD483bn
(US$14.4bn) fiscal stimulus package, which
includes a plan to distribute
TWD3,600 worth of shopping vouchers to every Taiwanese at the start the
year. Meanwhile, the fiscal stimulus package includes sizeable investment in
infrastructure, which should
help the construction sector. BMI forecasts
that growth in the construction sector will be 4.7% in 2008,
falling to 4%
in 2009. By 2013, the sector should have reached a value of US$14.5bn.
Taiwan’s sea-based freight will be positively impacted by the news that
Taiwan and China have now
opened direct shipping links. The direct
services will result in cost savings and will generate new business
for
both parties. The thaw in political tensions has occurred since Taiwanese
President Ma Ying-jeou took
office in May and began to reverse the
pro-independence policies of his predecessor Chen Shui-bian.
Direct access
to the highly developed eastern China ports and markets will boost trade
volumes, creating
more opportunities for exports and, according to
analysts quoted in the relevant report in SteelGuru,
Taiwan’s main
ports will see some of the traffic it had lost to China resume. It is
therefore highly likely
that if in fact the Sino-Taiwan relations enter a
new era, port overhauls, expansions and upgrades will
become a
priority.
Indeed, in December 2008, the Taiwanese government ruled that 10
major infrastructure projects should
go ahead under the direction of
Taiwan’s four ministers without portfolio. One of these projects is
an
expansion of Kaohsiung Harbour,,Taiwan’s largest seaport. The
expansion is expected to create 27,000
jobs and to create business worth
TWD39.4bn (US$1.2bn) upon completion. The project will be a
partnership
between the public sector and private enterprise.
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