Economy & Market
Construction sector shows degrowth for the past 3 years
A slowdown in sectors such as housing, railways, power, roads and highways has pushed the construction industry towards its three consecutive year of degrowth. According to data from Department of Industrial Policy and Promotion, intrinsic growth in the cement sector has dropped by 7 per cent, steel sector by 25 per cent and construction equipment sector by 27 per cent. Stalled projects due to lack of approvals, over leveraged balance sheets, cautious bank lending and lack of new project sanctioning were cited as the major reasons for this degrowth by experts and industry analysts. Employment growth shows the most alarming picture with FY15 witnessing a 12 per cent drop, while the growth in FY16 expected to be 30 per cent lower, which can lead to a loss of around 12 lakh jobs in real terms by FY16 end, according to the Construction Industry Development Council (CIDC).