BMI View: Pakistan's construction sector continues to face major headwinds. Widespread corruption, lack of protection for property owners and limited government spending are all hampering growth, as is the worsening security situation which continues to deter potential foreign investors. The country's growth potential is substantial - transport, utilities and social/residential infrastructure are suffering from years of underinvestment and Pakistan's large labour pool and extensive natural resources mean that, should the investment environment improve, growth could be rapid. At present, however, this potential is unlikely to be realised and growth will remain subdued.
Forecasts and Latest Updates
Chinese President Xi Jinping has signed an agreement with Pakistan promising investments worth USD46bn. The investments will be focused on building the China-Pakistan Economic Corridor, which will be a network of railways, roads and pipelines between the two nations. The economic corridor will run 3,000km from Gwadar, Pakistan to the western Xinjiang region in China.
Transport and utilities are the main focus of investment, with a large number of projects under way in both sectors. Both are benefiting from regional financing: the Asian Development Bank (ADB) is providing USD800mn of loans to strengthen the country's power sector infrastructure as well as co-funding the USD327mn Hassanabdal-Havelian Expressway (E-35) project.
Pakistan's construction sector saw growth of an estimated 3.59% in 2015, down from 5.82% growth in 2014. Over the remainder of the forecast period we expect to see annual growth of around 4% in construction industry value which, although positive, falls far short of Pakistan's potential growth.
|f = BMI forecast. Source: Pakistan Bureau of Statistics, BMI|
|Construction Industry Value, Real Growth, % y-o-y||3.59||3.74||3.82||3.82||3.89||3.98||4.08|
|Construction Industry Value, % of GDP||2.3||2.3||2.3||2.3||2.3||2.2||2.3|
|Construction industry value, PKRbn||611.36||661.76||726.74||798.10||876.99||964.55||1,061.80|
Pakistan has a weak overall score of 37.5 out of 100 on the Infrastructure Risk/Reward Index and the country ranks 15 th out of 17 countries in the Asia region, ahead only of Myanmar and Cambodia.
The country's score is held back by a poor performance in the Rewards section, where slow growth is a result of limited public spending capacity and lack of private investor interest.
The Risks performance, although slightly more positive, is still subpar due to widespread corruption and the underdeveloped nature of the construction sector.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Pakistan 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 Pakistan Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Pakistani infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Pakistan to test other views - a key input for successful budgetary and planning in the Pakistani infrastructure market.
- Target business opportunities and risks in the Pakistani infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Pakistan.
- 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.