India to be 3rd Largest Construction Market on 2025

‘Global Construction Perspectives and Oxford Economics’ in a recent study envisaged India to occupy the 3rd position among world’s largest construction market by 2025, with 11.5 million homes being added per year to reach a $1 trillion a year market. IndiaMART Knowledge Services (IKS) through their survey among SMEs within the building and construction sector, attempted to analyze the current business scenario, tallying the parameters like employment, future sales scope and barriers to growth.

The study revealed that though economic conditions remained unstable, almost 60% of the SMEs in the sector have witnessed improvement in their business operations during the last year. With this growth pattern, over 46.9% of SMEs are looking forward to a bright future and expecting improved sales between 0-20% led by regular inflow of demand.

The key findings by IKS can be highlighted as:

Business Operations: Corporate growth saw an increased hiring of employees by 46.1%, while sales growth counted to 56.1% and 51.5% increase in production capacity.

Orders: Respondents accounting for 44.6% received orders exceeding the worth of Rs. 25 lakhs.

Export: Not much changes happened in the export front, which remained stagnant at 44.6% of SMEs for the year 2012. While little improvement was cited for 27.7% SMEs, same percentage experienced decline in demand too.

Challenges: For more than 40% SMEs limited availability of finance was a major challenge. Approximately 27.7% feel increase in steel and cement prices as an obstacle to their growth and 16.9% find lack of trained/skilled manpower as an area of concern. Only 12.3% found improper infrastructure as a bigger challenge that they faced in the past 1 year.

Again, India has to meet the demand of homes as per the population growth and this will influence the  investment in property businesses.