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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