Maldives Monetary Authority (MMA) has revealed the performance of the construction sector continued to be buoyant during the first half of the year, underpinned by strong credit growth along with rising demand. The construction sector continued to grow during the first half of the year, according to the Quarterly Economic Bulletin of MMA.
MMA stated the continued growth was largely bolstered by various public sector infrastructure projects such as the expansion of Velana International Airport (VIA), development of Hulhumale' phase two, construction of Sina-Male' Bridge, Dharumavantha Hospital and Male' re-development project.
Meanwhile, growth in private sector investments in residential housing and tourism also provided further momentum to the growth of the sector.
Looking at the key indicators used to gauge the sector growth, both bank credit to the sector and construction-related imports, posted a notable upturn during the period. Commercial bank credit to the construction sector registered a marked annual growth of 23% in quarter one, largely due to a growth in loans for residential housing, new resort development and construction of guest houses. However, the growth in bank credit was partly offset by the annual decrease in loans for renovation of resorts during the first half of the year.
The robust growth in the construction sector was also evident from the upsurge in the value of construction sector-related imports, which recorded a remarkable annual growth of 51% during quarter one. This was mostly due to an increase in the volume of base metal and articles of base metals; cement and aggregates and; wood and articles of wood imported during the period.
Looking at the composition, construction-related imports by the tourism sector which accounted for 35% of the total construction-related imports witnessed the largest growth, with an increase of USD 54.8 million in annual terms.
Meanwhile, private sector which carried the highest share grew by USD 36.8 million during the period, while construction-related imports by the government showed a growth of USD 33.5 million.
The future prospects of the sector remains optimistic as respondents to the Quarterly Business Survey carried out by MMA for the second quarter of 2018, indicated anticipation of further increase in the level of their construction activity during the third quarter of the year.
In addition, the respondents also indicated expectation of additional capital investments to take place in the next quarter.