Boston, MA -- (SBWIRE) -- 03/07/2013 -- BMI View: The renewed demand for housing and the increase in trade activity has given us cause to believe that construction activity in Taiwan could see a short-term recovery, despite our expectations of a deep economic slowdown in China, Taiwan's main trading partner, in 2013. We estimate that 2012 saw flat construction growth (compared to a previous forecast of 1.2%) and forecast it to recover modestly to 4.9% in 2013. Over the long term, we are growing increasingly concerned about Taiwan's demographic profile and the lack of progress with achieving greater economic integration with China. Both factors could create a dour investment climate for construction, and we have revised down our long-term forecasts to reflect this outlook.

Key developments that will impact growth include:

- In August 2012, Taiwan's Council for Economic Planning and Development (CEPD) approved a TWD66bn expansion plan for the country's international ports, according to Port Technology. The programme will last for five years and Taiwan International Ports (TPI) will solicit transshipment business from mainland China's second-tier cities for Kaohsiung Port. TPI is responsible for Taiwan's four international ports: Keelung, Taichung, Kaohsiung and Hualien. According to Port Technology, TPI submitted its plans to the CEPD, which calls for an investment of US$50.7bn towards current projects, and a further US$15.3bn for future projects. According to reports, the investments will be used to upgrade port infrastructure, and to the building of new cruise ship terminals and a new container facility at the Port of Kaohsiung.
- In November 2012, the construction of a mass rapid transit line at Taiwan Taoyuan International Airport is likely to be postponed after the expiration of a bid for the extension. The line, with terminal stations at Taipei Main Station and the airport, was initially estimated to have a length of 51.03km comprising 22 stations inbetween; however, after the extension of the line to Jhongli Train Station was approved by Executive Yuan, the line will now stretch 53.07km with 24 stations in between. The total construction cost is estimated to be TWD13.8bn (US$471mn). The construction plans are believed to have been impacted due to one reason or another, despite plans to get the extension line up and running by 2018.

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