While private housing and industrial construction continue to grow, shortage of labour and financial constraints remain hurdles, says the new RICS survey
The latest RICS India Construction Market Survey for the third quarter of the year indicates that workloads in the sector continue to rise despite slowdown in the wider economy. Survey results indicate that sentiment remains relatively upbeat for both private housing and private industrial sectors. However, sentiment has turned negative for public non-housing segments. Additionally, construction workloads in energy and oil and gas, edged lower for the second consecutive quarter.
Interestingly, the all-important infrastructure sector is continuing to witness growth, although at a more modest pace than in the previous quarter of the year. The RICS India Construction Survey has been designed to capture the sentiment of professionals working in the sector and indicates that respondents are fairly upbeat on the prospects of workloads, employment and profit margins in the coming year. In fact, 97 per cent of the respondents anticipate an increase over the next 12 months on workloads, with growth expected to average between 7.5 and 10 per cent. The projected gain in employment in the sector over the same period however, is a little more modest at 2.5 to 5 per cent.
Not surprisingly given the strength of workloads in the present quarter and what is expected ahead, shortages of skilled labour continues to be a key factor limiting construction activity in the country at present. Responses to the survey indicate that skills shortages were visible across all fields including quantity surveyors, other construction professionals and also semi-skilled workers such as bricklayers, plasterers, plumbers, carpenters, and electricians. In fact 90 per cent of the respondents, much similar to the second quarter results of the survey indicated that shortage of labour and financial constraints were the most prominent factors limiting construction activity in the country, followed closely by planning and regulatory challenges. Other factors holding up construction activity have been attributed to insufficient demand, weather conditions, shortage of materials and completion issues.
The shortage of skilled resources has been responsible for slowing down construction activity by an average of six months to a year.