India is pegged to become the world’s third largest construction market by 2025, adding 11.5 million homes a year to become a $1 trillion a year market as per a recent study by Global Construction Perspectives and Oxford Economics. The future looks optimistic while the current economic conditions are yet to instill confidence in the players. Consisting of a fair share of SMEs, the sector dynamics are also defined by their performance.
IndiaMART Knowledge Services (IKS) conducted a survey among SMEs in the building and construction sector to understand the current business scenario and outlook. It reveals that more than 60% of the SMEs in the sector witnessed improved business conditions last year, despite a grim economic scenario. Also, over 46.9% of SMEs are optimistic for future too and expect improved sales between 0 to 20% led by regular inflow of demand.
Key IKS Survey findings include:
– Business operations: Around 46.1% hired more employees, 56.1% witnessed an increase in sales and about 51.5% increased their production capacity.
– Orders: 44.6% respondents received orders worth over Rs. 25 lakhs
– Exports: Exports remained same for 44.6% of SMEs in 2012. These improved for over 27.7% SMEs while similar percentage saw decline in the demand
– Challenges: Over 40% SMEs faced limited availability of finance as a major challenge. Around 27.7% felt rising steel and cement prices as a hurdle to their growth and about 16.9% find lack of trained manpower as an area of concern. Only 12.3% found improper infrastructure as a bigger challenge that they faced in the past 1 year
– Computers & internet: 78.8% find computers helpful for business & 72.3% also feel internet is quite useful tool for their business and they use it regularly