But while the fallen Asian economies have since recovered their footing, the construction industry is still flat on its back. This is primarily a consequence of the sheer scale of the construction boom in the period before 1997. The existing supply of office towers, upscale shopping complexes and luxury housing will take another two to five years to fill up, analysts say. The industry, though, could pull itself out of this prolonged slump faster if only it cleaned up its books, exited unviable projects and adopted a stronger market focus. Across the region, the crisis has forced construction companies to choose between wrenching change and slow death, but few players have faced up to that reality.
Japanese companies are a case in point.
While Jakarta's political muddle is keeping investors out of Indonesian construction, Kuala Lumpur's heavy budgetary spending on housing and infrastructure isn't enough to make up for the lack of private-sector demand, analysts say. As for Hong Kong, whose economy depends to a great degree on the health of its property market, and Singapore, construction languishes from depressed financial markets and low consumer confidence. But it's the countries hardest hit by the crisis, Korea and Thailand, which appear to have drawn the most extreme and markedly different lessons as to where the future of the industry lies. What's more encouraging, it's now becoming apparent that Korean companies that are changing the way they do business are doing much better than those that aren't. Thailand's, however, is a story of opportunity wasted.