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Favorable Prospects for Construction Market: Technology Driving Lucrative Returns on Investment

Survey Indicates Promising Future for Construction Industry: Tech-driven Innovations Yielding Attractive ROI

KPMG, a global professional services firm, has conducted a survey on the construction industry and found that the Indian market is displaying a positive outlook. According to the survey, 84 percent of respondents in India expressed optimism about the sector, compared to a global average of 66 percent. The respondents showed enthusiasm regarding potential government funding, investment, and incentives for significant infrastructure projects.

Suneel Vora, Partner at KPMG in India, highlighted the strong outlook for the Indian construction industry, attributing it to government infrastructure stimulus, manufacturing incentives, and commitments from the private sector. Vora mentioned that a significant proportion of participants anticipated 20 percent revenue growth or an increase in capital investments within the next 12 months. The implementation of digital and innovative technologies was cited as generating favorable returns on investment and cost reductions.

The Indian government’s initiatives, such as the National Infrastructure Pipeline with a projected investment of USD 1.4 trillion and the National Monetisation Pipeline (NMP) with a potential asset creation of USD 70 billion during FY20-25, have further boosted infrastructure investment.

Despite being one of the fastest-growing sectors contributing to economic growth, the Indian construction industry faces several challenges. These include disruptions in the supply chain, rising energy costs, increased material and labor expenses, and a shortage of skilled workers.

The impact of the COVID-19 pandemic is evident, with 51 percent of respondents reporting schedule delays or cost impacts of over 20 percent on their projects. The survey also highlighted poor project performance, with 39 percent of respondents indicating that they missed budget or schedule targets by 20 percent in the past year due to inadequate risk management.

The survey involved 119 senior leaders and CXOs representing infrastructure/project owners, engineering and construction firms, and government bodies responsible for implementing construction programs and projects.

In summary, KPMG’s survey reveals a positive sentiment in the Indian construction industry, driven by government initiatives and private sector commitments. However, challenges such as supply chain disruptions and the impact of the pandemic remain. Effective risk management and the adoption of digital technologies are expected to play crucial roles in overcoming these challenges and driving growth in the sector.

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