Asian economic development and construction sector outlook: Soumitra Sharma, IHS (Singapore)
Filmed at Cemtech Asia 2015, 21-24 June, Grand Hyatt, Bangkok, Thailand
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just talking of IHS first because they pay my salary, in terms of looking at their knowledge base.
This is a company which has expanded inorganically very rapidly over the last two decades and it has very strong databases across various commodities sectors including cement of course, so we have around 1000 experts globally working on various sub sectors. What we deal with, is we have information we use analytics and we provide expertise on each of the sub sectors in the construction segment, of course we have other sectors as well, one of major ones being energy.
And chemicals which we are very strong at and automotive as well. In terms of our core staff and construction sector we have around 100 and then we have other 1000 experts which are part of the economic and country risks team which works in construction outlooks. So I think we work with all types of players, we work with small business as well as the large companies across 165 countries.
We're fairly diverse in that sense and as I said our focus areas remain automotive, maritime, aerospace and defense, energy, chemicals. So, we are fairly a diverse company with both expertise in terms of economic outlook as well as sector expertise, so we're the only ones in this space which is quite has a right mix of deep tie into certain sectors as well as macroeconomic outlook. And then of course we help our clients in strategy planning, operations and engineering as well. So in terms of our construction sector we have a very strong tool which is called IHS Connect, has a lot of information on each of the countries as well as compile at ASEAN or you can just, it's kind of a database tool which we use to help provide strategy consulting as well in this space.
So, with that done I think I'll go to highlights of the global economic outlook which is the core of the topic. What we see is that global GDP will gradually move up back again from 2.7 this year to around 3.3 in 2016. This is primarily driven by United States, United Kingdom and India being the outliers in terms of growth as compared to the last year.
While one of the other aspects of Euro-zone and Japan which we're seeing a negative growth have now started to grow modestly, and then some of the earlier growth players like Brazil and Russia are contracting. So what we're seeing is in the last two decades there was a kind of a convergence and recent times and in the forecast what we see is that there'll be a divergence in this sense because for example, if you look at the bricks economy itself, Brazil and Russia are performing differently.
China is seeing growth, not a high growth. Seeing a decline in the growth aspects and India against outliers as well. And same is the trend with many emerging markets. If you look at Russia, Venezuela, Argentina and Brazil they're all in the falling in terms of growth. So looking at of course one of the major factors which is driving this is the oil prices which are helping the oil consumers versus the oil producers. There are estimates roughly around 1.5 trillion worth of GDP is being transferred just because of the price changes from the oil producers to the oil consumers. So this is good news for some of the oil consumer countries and of course there is a consumer spending and home building lead in US which is also driving a bit of growth in the construction sectors. And of course the good part from Asia perspective is Japan is again gaining a little bit of momentum from a negative growth to now it's on a positive side which is driven by of course the monetary policy and currency depreciation as well.
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