Construction output is expected to reach Rs.61,721.3 bn by 2026
The construction industry in India is forecast to grow by 12.8% to reach Rs.40,982 billion in 2022, according to a ResearchAndMarket report released on 9 Dec 2022.
Despite near-term challenges in certain construction sectors, medium to long term growth story in India remains intact. The industry is expected to grow steadily over the next four quarters.
The growth momentum is expected to continue over the forecast period, recording a CAGR of 10.8% during 2022-2026, with output in the country expected to reach Rs.61,721.3 billion by 2026.
Order inflows in the railways, roadways and drinking water sectors are expected to be healthy in 2022, supporting the growth of the Indian construction industry. This, along with the increased spending from the government on infrastructure projects, is projected to drive market growth.
While buildings and roads continue to account for the bulk of the order book, urban and metro infrastructure, along with water and sanitation, have also seen significant expansion in the order book over the last few years.
However, the rising commodity prices and the increased competition in the space are expected to have an impact on the construction industry’s profitability.
Over the last few years, the Indian government has carried out several infrastructure projects, resulting in increased spending on the sector. This trend has continued further in Q2 2022.
The Government spending on infrastructure projects has seen a sharp surge in Q2 2022. Compared to Q2 2021, the capital expenditure during the quarter surged 57% to reach Rs175,000 crore.
Notably, the Government is well on its course to building more national highways and rail lines during the 2015 to 2025 period. By the end of 2025, the Government is planning to have the total length of national highways reach 180,000 km, while that of the rail lines reach 120,000 km.
The increasing Government spending on these infrastructure projects is projected to keep driving the growth of the overall construction industry in India over the next three to four years, said the report. fiinews.com
