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India's construction industry is predicted to grow at 7-8 per cent each year over the next decade. With the new government, the country is expected to see increased economic growth and more foreign investment that will boost the demand for construction over the coming years , according to a report by international consultancy giant PwC. An estimated $1 trillion would be spent on infrastructure over the next three years to 2017.

The private housing sector would be the major player here.The total construction market in India for fiscal year ending March 2014 was $157 billion, an increase of $4 billion over FY2013. Infrastructure accounts for 49 per cent, housing and real estate for 42 per cent and industrial projects for 9 per cent.However India Ratings & Research maintains a negative outlook on the construction sector for FY15, due to strained liquidity resulting from lengthened working capital cycles and restrained lending by banks.

Also, delays in statutory clearances impede timely completion of projects. All these factors are likely to continue to put pressure on construction companies in the days to come.Banks continue to be cautious while lending as the construction and infrastructure sectors together account for over 20% of the aggregate debt under the corporate debt restructuring mechanism.


The Reserve Banks order of restricting the sanction and roll-over of short-term loans also adds to the fire.Order execution of the Indian Construction Industries will continue to be sluggish in FY15 due to reduced ability of companies to fund working capital and delays in statutory clearances.

Consequently, the aggregate revenue growth of the sector will continue to decline, with some companies facing a fall in revenue. Debt and interest costs continue to be high, due to increasing working capital requirements thus predicting a sluggish period for the Indian Construction Industry.

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  Construction Chemicals Manufacturers' Association (CCMA)

  Indian Construction Equipment Manufacturers Association (ICEMA)

  Builders' Association of India (BAI)

 

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