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NOTE: To change images on this slide, select a picture and delete it. Then click the Insert Picture icon in the placeholder to insert your own image. MARKET ANALYSIS ON CONSTRUCTION INDUSTRY IN INDIA. BY- Pooja Rahul Sharma HL centre for professional excellence Ahmedabad. Introduction.

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market analysis on construction industry in india

NOTE:

To change images on this slide, select a picture and delete it. Then click the Insert Picture icon

in the placeholder to insert your own image.

MARKET ANALYSIS ON CONSTRUCTION INDUSTRY IN INDIA

BY-PoojaRahul Sharma

HL centre for professional excellence

Ahmedabad

introduction
Introduction
  • The construction industry is the second largest industry of the country after agriculture accounting for 11 percent of India’s GDP. Indian construction industry employs 32 million people and its total market size is estimated at Rs. 2,48,000 crores . The level of a country’s development is reflected by its infrastructure and the desperate need for infrastructure development has increased the demand of the construction industry in India.
  • The activities of the construction industry include working on new structures as well as additions, alterations, and repairs to existing ones.
slide3

Segmentation of Construction Industry in India

  • Residential, industrial, commercial, and other buildings.
  • Sewers, roads, highways, bridges, tunnels, and other projects.
  • Specialized activities such as carpentry, painting, plumbing, and electrical work.
slide4

Outlook for Indian construction industry

  • Expected growth of wage and salary jobs in the construction industry will be about 15 percent through the year 2013.
  • The demand for residential construction is expected to continue to grow.
  • Construction of nursing homes, Old Age homes, and other extended care institutions also will increase due to aging population.
  • Employment in heavy and civil engineering construction is projected to increase due to increase in highway, bridge, and street construction
slide5

Overview of Construction Industry in India

  • India is the second fastest growing economy in the world.
  • Construction is the second largest economic activity after agriculture.
  • Construction accounts for nearly 65 per cent of the total investment in infrastructure.
  • Investment in construction accounts for nearly 11 per cent of India’s GDP.
  • Rs. 16,747.67 billion is likely to be invested in the infrastructure sector over the next 5 to 10 years.
  • Investment into this sector could go up to Rs. 6,521.06 billion by FY 2010.
  • The real estate and construction sectors received FDI of Rs. 15.13 billion in the first half of the current fiscal year (2008).
indian real estate sector
Indian Real Estate Sector
  • Real Estate is a Rs. 558.94 billion (by revenue) Industry in India.
  • It is projected to grow to Rs. 2,375.61 billion by 2010.
  • It is the second largest employing sector in India.
  • Real Estate is linked to about 250 ancillary industries like cement, brick and steel through backward and forward linkages.
  • There will be a demand for over 24.3 million new dwellings for self-living in urban India alone by 2015.
  • Rs. 1,118.06 billion investment will be required over the next five years in urban housing.
global majors in india
Global Majors in India
  • Due to significant investment opportunities emerging in this industry, a large number of international real estate players have entered the country.
  • FDI inflows into this sector are estimated to be between or Rs. 209.59 billion and Rs. 244.50 billion.
global majors in india1
Global Majors in India
  • Jones Lang LaSalle (JLL), the world's leading integrated global real estate services and money management firm, plans to invest around Rs. 45.13 billion.
  • DAMAC Properties would invest up to Rs. 202.67 billion.
  • Merrill Lynch & Co has bought 49 per cent equity in seven mid-income housing projects of India's largest real estate developer DLF in Chennai, Bangalore, Kochi and Indore for Rs. 16.99 billion.
  • Rakindo Developers would invest well over Rs. 209.59 billion over the next five years.
  • Dubai-based Nakheel and Hines of the US have tied up with DLF to develop properties in India.
  • DLF has also formed a joint venture with Limitless Holding, a part of Dubai World, to develop Rs. 630.24 billion township project in Karnataka.
  • Gulf Finance House (GFH) has decided to invest over Rs. 70.01 billion in a greenfield site close to Navi Mumbai.
government initiatives to help indian construction industry
Government Initiatives to help Indian construction industry
  • 100 per cent FDI has been allowed in realty projects through the automatic route.
opportunities in the indian construction industry
Opportunities in the Indian construction industry
  • The Indian real estate industry is likely to grow from Rs. 490.03 billion in 2005 to Rs. 4,060.24 billion in by 2015.
  • Foreign direct investment alone might see a close to six-fold jump to Rs. 1,329.96 billion over the next 10 years.
swot analysis on construction industries in india
SWOT Analysis on Construction Industries in India
  • Strengths
  • Employment and training opportunities in the field of construction.
  • Private sector housing boom and commercial building demands Construction of the multi building projects on the feasible locations in the country.
  • Good structured national network facilitates the boom of construction industry.
  • Low cost well- educated and skilled labour force is now widely available across the country.
  • Sufficient availability of raw material and natural resources in the country is supportive for the industry
swot analysis on construction industries in india1
SWOT Analysis on Construction Industries in India
  • Weakness
  • Distance between construction projects reduces business efficiency.
  • Training itself has become a challenge.
  • Changing skills requirements and an ageing workforce may emphasize the skills gap.
  • Improvement in long-term career prospects is highly required to encourage staff retention and new entrants.
  • External allocation of large contracts becomes difficult.
  • Lack of clearly defined processes and procedures for construction and its management.
  • Huge amount of money needs to be invested in this industry.
swot analysis on construction industries in india2
SWOT Analysis on Construction Industries in India
  • Opportunities
  • Continuous private sector housing boom will create more construction opportunities.
  • Public sector projects through Public Private Partnerships will bring further opportunities.
  • Developing supply chain through involvement in large projects is likely to enhance the chances in construction.
  • Renewable energy projects will offer opportunities to develop skills and capacity in new markets.
  • More flexible training delivery techniques are now available.
  • Financial supports like loan and insurance and growth in income of people is in support of construction industry.
swot analysis on construction industries in india3
SWOT Analysis on Construction Industries in India
  • Threats
  • Long term market instability and uncertainty may damage the opportunities and prevent the expansion of training and development facilities.
  • Current economic situation may have an adverse impact on construction industry.
  • Political and security conditions in the region and Late legislative enforcement measures are always threats to any industry in India.
  • Infrastructure safety is a challenging task in construction industry.
  • Lack of political willingness and support on promoting new strategies.
  • Natural abnormal casualties such as earth quake and floods are uncertain and can prevent the construction boom.
  • Inefficient accessibility in planning and concerning the infrastructure.
  • Competitors are emerging in the industry by leaps and bounds.
problems faced by construction industry
Problems faced by construction industry
  • Construction industry suffers from capacity constraints.
  • Lack of trained manpower and managerial skills with performance much below international level.
  • The industry is starved of finance.
  • Small and medium contractors do not have the wherewithal to upgrade their capability.
  • Quality, safety, environment and social aspects are also not being addressed appropriately.
conclusions
Conclusions
  • In the years ahead, the construction industry in India has to overcome various challenges with respect to housing, environment, transportation, power or natural hazards.
  • Technocrats associated with the Indian construction industry need to employ innovative technologies and skilled project handling strategies to overcome these challenges.
  • The outstanding performance under demanding situations in the past will stand in good stead and give confidence to the Indian construction industry to bring about an overall development in the infrastructure of the nation.
  • Investment in the Infrastructure sector could go up to Rs. 6,521.06 billion by FY-2010 which in turn translates to a good potential for the Construction
swot analysis on construction industries in india4
SWOT Analysis on Construction Industries in India
  • Weakness
  • Distance between construction projects reduces business efficiency.
  • Training itself has become a challenge.
  • Changing skills requirements and an ageing workforce may emphasize the skills gap.
  • Improvement in long-term career prospects is highly required to encourage staff retention and new entrants.
  • External allocation of large contracts becomes difficult.
  • Lack of clearly defined processes and procedures for construction and its management.
  • Huge amount of money needs to be invested in this industry.