Mumbai, India’s construction sector has witnessed a remarkable surge, growing by 13.3% in July-September compared to the previous year, marking its strongest performance in five quarters. This development, revealed in recent GDP data, positions the construction industry as a key driver of India’s economy, expanding at a forecast-beating rate of 7.6%.
The growth in the construction sector has played a pivotal role in India’s economic success, creating millions of jobs and contributing significantly to the nation’s GDP. This robust performance contrasts with Western economies grappling with high interest rates and energy prices, and China facing challenges due to a debt crisis in its property sector.
The boom in India’s construction sector follows a period of around six years marked by debt and pandemic-induced downturn. The turnaround began last year and has gained momentum this year, fueled by rising incomes, a severe housing shortage in major cities, and robust population growth.
India, the world’s most populous nation, faced an urban housing shortage of approximately 19 million units last year, a number expected to double by 2030, according to government estimates. Builders express optimism, with some anticipating that the housing boom could last two to three years.
“The robust growth in construction has significantly contributed to economic growth and is likely to play the same role in the next couple of quarters,” says Sunil Sinha, an economist at India Ratings and Research.
Key highlights of the construction sector’s impact on India’s economy include:
– Job Creation:The construction boom has generated millions of jobs, providing employment opportunities across various skill levels.
– Economic Expansion: India’s GDP grew at a forecast-beating 7.6%, positioning the country as one of the world’s fastest-growing major economies.
– Housing Demand:Home sales in major cities surged by 36% in the July-September quarter compared to the previous year, reaching over 112,000 units. The demand is driven by first-time buyers, with nearly 80% of houses purchased by end users.
– Urban Housing Shortage: India faced an urban housing shortage of around 19 million units last year, expected to double by 2030, indicating a sustained demand for housing.
Builders anticipate the housing market’s positive performance to continue for another three to four years, highlighting India’s position in the initial stages of a housing growth cycle.
By Reuters
