Research Briefing | Mar 28, 2024

India Construction Outlook, March 2024

What you will learn:

  • We forecast total construction work done to grow 2.1% in 2024. Stronger than expected economic performance, government expenditure and resilient investment will support activity in the near term. However, a weakening global backdrop resulting from slower economic activity in the US and China, as well as input price inflation and the lagged impact of monetary policy is expected to place downward pressure on demand over the outlook period. Over the forecast horizon, residential activity will be the main driver of growth. We now forecast activity to grow 3.6% p.a. over the four years to 2028.
  • We expect residential building work done to expand 3.2% in 2024. The release of pent-up demand and a robust pipeline of approved projects, in particular the developments scheduled under the SWAMIH Fund, is expected to be supportive of sector growth over the outlook period. However, inflationary pressures and heightened interest rates will place stress on housing affordability and dampen demand for residential building.
  • We forecast non-residential building work done to fall 2.3% in 2024. We expect a moderation from the previously elevated baseline. The recovery in tourism and strong government capital expenditure will aid activity. However, fiscal consolidation and heightened cost pressures will weigh on the sector over the outlook period.
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