CONSTRUCTION SECTOR OVERVIEW-2020
Statistics, news & updates: everything you need to know about the Construction Industry in India
- COVID-19 Impact
- Industry Clusters
- Growth Drivers
- Key Players
- Market Stats
- Building Equipment
- Doors and Windows
- Engineered wood & equipment
- Glass & glazing products
- Highways, Street & Bridge Construction
- Material & allied products
- Mechanical, Electrical & Plumbing equipment (including pipes for construction)
- Residential remodelers
- Roofing & Flooring products
- Structural steel & pre-cast steel contractors
Due to continuous urbanization, upcoming infrastructure projects and a growing population base, the construction industry in India is booming. With huge ongoing project opportunities, it is the third largest contributor to economic growth. Moreover, the industry employs more than 40 million people and has a large pool of low-cost workers. Besides, various governmental flagship programs like ‘Smart Cities’, ‘Housing for All’, ‘Make in India’ and ‘Atal Mission for Urban Rejuvenation and Transformation’ (AMRUT) will further drive growth. Owing to these efforts and government’s will to increase public private partnerships with foreign companies, it is expected to attract more foreign investment.
The construction industry has come to a standstill due to the pandemic coronavirus impact. It is estimated that most of the construction sites are running at 50% of their run rate. This is because the fear of infection is keeping the workers’ attendance at less than 70%. As per the industry body, at present, there are close to 20,000 ongoing construction projects at the pan India level. These engage a workforce of around 8.5 million only in construction work. Some of these projects are delayed while others are cancelled owing to COVID-19. Besides, there are supply chain bottlenecks that result in reduced or no supply of equipment and materials including structural steel and glass from Asia.
To deal with the impact of COVID-19, the Finance Minister has announced some relief measures. The state governments are directed to use Rs. 31,000 crore welfare fund towards helping labourers in the construction industry.
The statistics below are taken from Industry data available pre-Corona virus impact.
- Population growth, urbanization, industrialization and rise in disposable income are key growth drivers of the industry.
- It is expected to be the world’s 3rd largest construction market by 2025.
- 100% FDI under the automatic route is allowed in the construction development sector.
- Cement capacity addition of 80-100 MT per annum is expected over the next five years.
- The government has made tremendous efforts to improve residential and transport infrastructure.
- The government has increased its expenditure on infrastructure development by 20.9%. It was INR 4.9 trillion (US$ 75.9 billion) in the Financial Year FY 2017-2018 which is increased to INR 6 trillion (US$ 89.2 billion) in FY 2018-2019.
- Investments valued around US$ 965.5 Mn are expected to be required by the infrastructure sector by 2040.
- Development of 100 smart cities by 2020.
Key Players in India
- L&T Engineering Construction & Contracts Division (ECC)
- Larsen & Toubro Infrastructure Development Projects Limited (L&T IDPL)
- Reliance Infrastructure Limited
- Tata Projects Limited
- AFCONS Infrastructure Limited
- IRCON International Limited
- Shapoorji Pallonji & CO. Ltd.
- GMR Infrastructure Limited
- Jaiprakash Associates Limited
- Nagarjuna Construction Company Limited
- Hindustan Construction Company
- DLF Limited
- Leighton Welspun Contractors
- The Trump Organization
- Power Construction Corp. of China
- TOYO Engineering
- The construction industry GVA share accounts for 7.3% in FY18.
- Share of infrastructure spending in the construction sector as a part of India’s GDP rose to 9% in 2017.
- India stands as the second largest employer, employing more than 49 million people in the sector.
- The Indian real estate sector is expected to reach a market size of $ 180 billion by 2020.
- The Construction industry is expected to record a CAGR of 15.7% to reach $ 738.5 billion by 2022.
- Foreign Direct Investment (FDI) received in the Construction Development sector (townships, housing, built-up infrastructure and construction development projects) from April 2000 to March 2019 stands at US$ 25.05 billion.
- Institutional investments in Indian realty touch $ 4 billion in 2018.
- Construction output is expected to grow on average by 7.1% each year.