Question

There is a lot of construction happening in Bangkok Metropolitan area these days, both residential property and business objects are being built. Explain how they affect GDP now and how they will contribute to Thailand’s GDP in the future. Specify the elements of GDP they affect.

Answer 1

The construction industry plays an important role in the economy, and the activities of the industry are also vital to the achievement of national socio-economic development goals of providing shelter, infrastructure and employment. It is clear that construction activities affect nearly every aspect of the economy and that the industry is vital to the continued growth of the economy.

Thailand is the second-largest economy in Southeast Asia, after Indonesia. The economy of Thailand is dependent on exports, which accounts for more than two-thirds of the country's gross domestic product (GDP). The rising of industrial construction in Thailand is expected to be the backbone of Thailand's future economic dominance in the region. The construction sector itself will play a critical role in developing the nation's economy.According to statista  In 2017, the construction industry in Thailand accounted for approximately 8% of GDP or 395 billion baht. In 2018, the value of the market was approximately 410 billion baht, a 2.8% year-on-year increase in real terms. In 2019, the construction sector contributed approximately 422 billion Thai baht to the country's GDP. Thailand Construction market is consolidated, with over 10,000 contractors, according to registrations with the Department of Business Development. But big contractors dominate, with the top five firms holds 70% market share.The construction sector output is expected to reach the rate of 3.19%, which can be supported by a government investment in infrastructure development. In order to be able to develop much further, construction will be the backbone of Thailand's economic future.

The element of GDP which is affected by the construction is investment. The construction of new public utilities increases the investment, employment and consumption in economy which directly influence the GDP.