Construction & Real Estate
From The Report: Papua New Guinea 2012
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The construction sector in PNG has been booming over the past half-decade, driven by major initiatives such the PNG LNG project. The wealth of contracts available has fostered healthy competition between Australian firms, traditionally dominant in the local market, and newly arrived Western companies. Hoever, the influx of money and workers has created a bubble in office and residential prices and will almost certainly lead to oversupply when the major projects wrap up. At the same time, the anticipated increase in wealth will fund construction projects around the country, including urban developments outside of the big cities that will hopefully staunch urban migration.

This section features an interview with Keith Fletcher, Managing Director, Fletcher Morobe Construction.

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Overview

Gas-fired growth: Despite constraints, expansion is expected to continue through 2014
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In 2011 Papua New Guinea’s economy was expected to experience 8.9% growth, driven primarily by the development of the $15.7bn ExxonMobil-led PNG Liquefied Natural Gas (LNG) project and its knock-on effects in the construction and related economic sectors. Further growth in 2012 will represent 12 years of uninterrupted economic expansion, and PNG’s government expects this uptick will be sustained by construction industry activities linked to the LNG project as well as in commercial and residential…

Interview

Partnering opportunities: OBG talks to Keith Fletcher, Managing Director, Fletcher Morobe Construction
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Interview: Keith Fletcher What public-private partnership (PPP) opportunities exist for infrastructure and construction? KEITH FLETCHER: The government has been promoting PPPs in various sectors. A good example is the development of the land surrounding the airport, which use a PPP framework whereby the government supplies the land and private partners provide the capital. PPP projects are available in various segments, including in the infrastructure development of airports, seaports, highways…

Analysis

Labour crunch: Shortage of skilled workers constrains expansion but may be a source of future demand
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Despite experiencing double-digit growth in 2011, Papua New Guinea’s construction industry is operating with increasingly restricted supplies of both materials and skilled labour. Surveys conducted by the Bank of PNG predict a decline in employment growth amongst the building and construction sectors in 2012, but the government has cautioned that the surveys do not comprehensively cover employment from the PNG liquefied natural gas (LNG) project and its contractors, and positive growth is still…

Analysis

At last: Inroads are finally being made on land reform and ownership
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Overview

Hot, hotter, hottest: A correction seems likely, although opportunities remain in mid-market and affordable segments
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A decade of solid growth on the back of high commodity prices, strong financial institutions and ExxonMobil’s $15.7bn investment in a liquefied natural gas (LNG) production facility have transformed Papua New Guinea’s economy. Confidence remained high ahead of elections in 2012, despite the political volatility, and the property market, a weather vane of all economies, has continued to prosper. The expansion of the property sector over the past five years has surpassed that of the past 15,…