Real Estate & Construction Market Research in India | Infrastructure | Economy Of India

Market Research in India


MARKET RESEARCH ON CONSTRUCTION INDUSTRY IN INDIA This chapter comprises of the following sections; 1. Introduction 2. Outlook of Construction Industry 3. Overview of the Construction Industry in India 4. SWOT Analysis on Construction Industries in India 5. Problems faced by Construction Industry 6. Leading Construction Companies in India 7. Conclusion

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 (35,640 million €). 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.

Segmentation of Construction Industry in India

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

Outlook for Indian construction industry

o Expected growth of wage and salary jobs in the construction industry will be
about 15 percent through the year 2012.

o It is the second largest employing sector in India.68 billion or Rs.118. and street construction. o Real Estate is linked to about 250 ancillary industries like cement. 1. o Investment in construction accounts for nearly 11 per cent of India’s GDP.521. 16. o There will be a demand for over 24. o The real estate and construction sectors received FDI of €216.13 billion in the first half of the current fiscal year (2008). www.94 billion (by revenue) Industry in India. 6. o It is projected to grow to €34 billion or Rs.53 million or Rs. brick and steel through backward and forward linkages. and other extended care institutions also will increase due to aging population. Overview of Construction Industry in India o India is the second fastest growing economy in the world. o Construction of nursing homes. bridge. o €16 billion or Rs.747. Indian Real Estate Sector o Real Estate is a €8 billion or Rs. 15. o Employment in heavy and civil engineering construction is projected to increase due to increase in highway. o Construction is the second largest economic activity after agriculture.06 billion by FY 2010.36 billion or Rs. Old Age homes.06 billion investment will be required over the next five years in urban housing.67 billion is likely to be invested in the infrastructure sector over the next 5 to 10 years.375. o Investment into this sector could go up to €93.empulseglobal.Market Research in India 2 o The demand for residential construction is expected to continue to grow. o €239. o Construction accounts for nearly 65 per cent of the total investment in infrastructure.3 million new dwellings for self-living in urban India alone by 2015. .61 billion by 2010. 558.

50 billion or Rs. Government Initiatives to help Indian construction industry o 100 per cent FDI has been allowed in realty projects through the automatic route.13 billion. to develop a €9 billion or Rs.24 billion in by 2015. 45. a part of Dubai World. 70. plans to invest around €646 million or .9 billion or Rs. o Rakindo Developers would invest well over €3 billion or Rs. 244. Opportunities in the Indian construction industry o The Indian real estate industry is likely to grow from €7 billion or Rs.empulseglobal. 630.99 billion. 4. the world's leading integrated global real estate services and money management firm.03 billion in 2005 to €58 billion or Rs.Market Research in India 3 Global Majors in India Due to significant investment opportunities emerging in this industry. billion or Rs. 16. Kochi and Indore for €243 million or Rs. www.060. 209. 202. FDI inflows into this sector are estimated to be between €3 €3. o Gulf Finance House (GFH) has decided to invest over € 1 billion or Rs. o 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.24 billion township project in Karnataka.67 billion.59 billion over the next five years. 490.50 billion. o Dubai-based Nakheel and Hines of the US have tied up with DLF to develop properties in India. a large number of international real estate players have entered the country. Bangalore. 209.59 billion and o Jones Lang LaSalle (JLL).01 billion in a greenfield site close to Navi Mumbai. o DAMAC Properties would invest up to €2. o DLF has also formed a joint venture with Limitless Holding.

Year 2005 Year 2015 Amount in Rs. o Good structured national network facilitates the boom of construction industry.educated and skilled labour force is now widely available across the country.24 4500 4000 3500 3000 2500 2000 1500 1000 500 0 490. 1.03 This means that the growth of Indian Real Estate Industry will be more than 8 times in just 10 years. Billion o Foreign direct investment alone might see a close to six-fold jump to €19 billion or . o Sufficient availability of raw material and natural resources in the country is supportive for the industry.060. o Private sector housing boom and commercial building demands Construction of the multi building projects on the feasible locations in the country.96 billion over the next 10 years. www. SWOT Analysis on Construction Industries in India Strengths o Employment and training opportunities in the field of construction. o Low cost well.329.Market Research in India 4 4.

o Lack of clearly defined processes and procedures for construction and its management. o Improvement in long-term career prospects is highly required to encourage staff retention and new entrants. o Huge amount of money needs to be invested in this industry.Market Research in India 5 o Real estate development is on high and it is attracting the focus of the industry towards construction. o Developing supply chain through involvement in large projects is likely to enhance the chances in construction.empulseglobal. o Current economic situation may have an adverse impact on construction industry. o More flexible training delivery techniques are now . o Financial supports like loan and insurance and growth in income of people is in support of construction industry. o External allocation of large contracts becomes difficult. Opportunities o Continuous private sector housing boom will create more construction opportunities. o Public sector projects through Public Private Partnerships will bring further opportunities. o Renewable energy projects will offer opportunities to develop skills and capacity in new markets. o Changing skills requirements and an ageing workforce may emphasize the skills gap. Threats o Long term market instability and uncertainty may damage the opportunities and prevent the expansion of training and development facilities. www. o Training itself has become a challenge. Weakness o Distance between construction projects reduces business efficiency.

www. the construction industry in India has to overcome various challenges with respect to housing. safety.521. 6.06 billion by FY-2010 which in turn translates to a good Industry. environment.empulseglobal. Conclusions o In the years ahead. Problems faced by construction industry o Construction industry suffers from capacity constraints. o Competitors are emerging in the industry by leaps and bounds. o Infrastructure safety is a challenging task in construction industry. o Technocrats associated with the Indian construction industry need to employ innovative technologies and skilled project handling strategies to overcome these challenges. o Lack of trained manpower and managerial skills with performance much below international level. o Natural abnormal casualties such as earth quake and floods are uncertain and can prevent the construction boom.36 billion or Rs.Market Research in India 6 o Political and security conditions in the region and Late legislative enforcement measures are always threats to any industry in India. o Investment in the Infrastructure sector could go up to €93. o Lack of political willingness and support on promoting new strategies. transportation. environment and social aspects are also not being addressed appropriately. power or natural potential for the Construction . o Quality. o 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. o The industry is starved of finance. o Small and medium contractors do not have the wherewithal to upgrade their capability. o Inefficient accessibility in planning and concerning the infrastructure.

59 billion and €3. indicate that the downturn has bottomed out and highlight the Indian economy's resilience. 244.50 billion. sound legal system and a very stable political government at the centre  Indian economy has been witnessing a phenomenal growth since the last decade. according to a survey conducted by Dutch financial services firm ING  India has a very sound legal system  India also has a very stable political government at the centre now Indian construction industry is large and booming  The construction industry is the second largest industry of the country after agriculture accounting for 11 percent of India’s GDP  Construction accounts for nearly 65 per cent of the total investment in infrastructure.7 per cent in 2008-09. freight movement at major ports and encouraging data from a number of key manufacturing segments.  FDI inflows into this sector are estimated to be between €3 billion or Rs.  Despite the global slowdown. such as steel and cement.  A number of leading indicators. a large number of international real estate players have entered the country.50 billion or Rs.  Investor sentiment in India has improved significantly in the first quarter of 2009. www.  Due to significant investment opportunities emerging in this industry. such as increase in hiring. The country is still holding its ground in the midst of the current global financial crisis. 209.empulseglobal. the Indian economy is estimated to have grown at close to .Market Research in India 7 India is a country with a stable and growing economy.

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