Industry Newsletter
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WHAT’S
HAPPENING
IN THE WORLD OF
CONSTRUCTION?
In 2023, the construction industry
in India is expected to grow by
12.0% and reach INR 45,907
billion. Although certain sectors
face near-term challenges, the
medium to long-term growth
prospects remain promising.
Despite the surge in construction
costs, government spending on
infrastructure projects remained
robust in 2022 and is expected to
continue in 2023. This, coupled
with spending on commercial
projects and the demand for
residential units, will support
the growth of the construction
industry over the next few years.
The government’s increased
spending on infrastructure
projects will continue to bolster
the industry’s growth. The
government has announced a
strong pipeline of infrastructure
projects in various sectors and
has entered into loan agreements
with the Asia Development Bank
to fund these projects.
ADVANTAGE INDIA
Robust demand: India’s population growth
and economic development require improved
transport infrastructure, through investments
in roads, railways, and aviation, shipping and
inland waterways.
• Increasing Investments: Under Budget 2023-24, capital
investment outlay for infrastructure is being increased by
33% to INR 10 lakh crore ($122 billion), which would be
3.3% of GDP and almost three times the outlay in 2019-20.
• Policy support: Under the National Infrastructure Pipeline
(NIP), projects worth INR 108 trillion ( $1.3 trillion) are
currently at different stages of implementation.
• Attractive opportunities: Development of infrastructure
has a multiplier effect on demand and efficiency of
transport and increases commercial and entrepreneurship
opportunities.
In January 2023, the Indian government entered
into a loan agreement worth $1.2 billion for
funding infrastructure development, covering the
development of highways, improving connectivity
of the metro rail system, and enhancing
connectivity with key economic areas in the
region. The government’s focus on infrastructure
development is expected to drive investment
in the sector, supporting the growth of the
construction industry in India in the coming years.
At the same time, looking at the global
construction industry, it is projected to grow at a
CAGR of 4.2% between 2018 and 2023, reaching
a value of $10.5 trillion by 2023. Several emerging
trends are also influencing the construction
industry’s dynamics overall. These include:
Increased of Digital Technologies
A majority of construction companies
are leveraging digital technologies to broaden
their business horizons and improve profitability
by cutting costs in the long term and optimizing
project management. These advanced tools
have also revolutionized the construction
sector. Nevertheless, companies interested in
incorporating such technology must conduct
research to determine which machines are
best suited to aid with labor-intensive or time-
consuming tasks.
Green Building and Sustainability
The building and construction sector
contributes nearly 40% of worldwide energy-
related CO2 emissions. Nevertheless, the
industry is now making strides towards reducing
its environmental impact as global concern
over climate change intensifies. Customers are
increasingly prioritizing sustainability, compelling
developers to lower the carbon footprint of new
buildings. This growing awareness of climate
change may motivate construction firms to
integrate sustainable practices into their projects,
processes, and designs. Key players in the
industry are exploring methods to decrease
material waste from demolitions, switch to eco-
friendly building materials.
Remote Worksites
As a result of pandemic, the construction
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