BMI View: We expect a gradual pickup in construction activity over the coming years as reform momentum gains traction amid an improving funding outlook. Growth would be stronger, but we continue to see the sector being weighed by a challenging business environment, accentuated by the recent step-back in the government's land reform drive.
Key Trends And Developments
We remain conservative towards the near-term outlook of India's construction sector and forecast growth of 5.0% in FY2015/16 (April - March), a slight increase from the 4.8% real growth registered in FY2014/15. This is despite the Bharatiya Janata Party's (BJP) historic win in 2014 which brought optimism to the country's investment outlook.
Our more conservative forecast over the near term is underpinned by prevailing business environment challenges. This has been exacerbated by political headwinds that Narendra Modi faces in pushing through reforms, with a case in point being the step-back in land reforms.
A weak currency outlook makes it more costly for Indian infrastructure companies to buy overseas equipment and raw materials. India is also expected to remain in a weak position in terms of public finances.
Beyond FY2015/16, we expect a gradual improvement in the country's business environment as various reforms begin to gain traction and attract greater private investment. This will also be supported by a slow improvement in the funding environment. Consequently we forecast the construction sector to grow by an annual average of 6.3% between FY2016/7 and FY2019/20 in real terms.
We continue to see opportunities in road and rail related infrastructure as the government prioritises the development of the country's transport network and we expect the road and rail segments to account for a major part of the country's transport industry value.
Energy will also offer significant opportunities particularly in the renewables and nuclear power segments as the government has been keen to...
The India Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's India Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Indian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for India to test other views - a key input for successful budgetary and planning in the Indian infrastructure market.
- Target business opportunities and risks in the Indian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in India.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.