Construction starts decline in the first quarter

Despite facing a 1.9% year-on-year decline in approved building permits during the first quarter of 2023, the construction sector in the Philippines remains optimistic as the number of construction starts stays higher compared to the previous quarter, according to a report by Philippine News Agency.

The Philippine Statistics Authority (PSA) released data showing a total of 40,210 building permit approvals during the period, indicating a positive trend for the industry.

During this period, the total value of building permits surged to P101.7 billion, reflecting a noteworthy 5.5% increase from the same quarter in the previous year. The combined area covered by the approved projects reached an impressive 8.70 million square meters (sq.m).

Despite a 5.2% year-on-year decline in residential construction, the sector continued to dominate with 27,489 approved building permits. These permits were valued at P49.80 billion, showing only a marginal 2% decrease from the previous year. The total floor area for these residential projects was 4.65 million sq.m.

The majority of residential permits were for single-detached houses, making up 86.8% (23,849 permits) of the total. Although this segment experienced a 4.2% decline compared to the first quarter of the previous year, it remains higher than the fourth quarter of 2022.

A remarkable surge was observed in the non-residential sector, with a six-fold increase in approved permits year on year. The growth was primarily driven by commercial buildings, which saw a significant 27.2% increase to 6,168 permits.

Calabarzon, Central Luzon, and Central Visayas emerged as key contributors to the construction industry, accounting for more than half (53.6%) of the total construction value during the first quarter.

Additionally, the average cost of construction per sq.m increased by 1.9% year on year, signaling the resilience and potential of the construction sector in the Philippines. The industry's steadfastness remains promising as it navigates through ongoing challenges and aims for further growth in the coming quarters.