The Indian construction market exhibits a positive outlook with 84 per cent of respondents feeling optimistic about the sector compared to 66 per cent globally, a KPMG survey said on Friday.
KPMG’s Global Construction Survey said there is a sense of enthusiasm regarding the potential government funding, investment and incentives for significant infrastructure projects.
"The survey findings exhibit a strong outlook for our Indian construction industry, driven by the government infrastructure stimulus, manufacturing incentives and private sector commitments. This is reflected in a significant proportion of our participants, indicating 20 per cent revenue growth or increase in capital investments in the next 12 months," KPMG in India, Partner, Major Projects Advisory and Industry 4.0, Suneel Vora said.
Digital and innovative technologies are generating handsome returns on investment and generating real-time cost reductions, Vora added.
The government's announcement of National Infrastructure Pipeline with a projected investment of USD 1.4 trillion and National Monetisation Pipeline (NMP) with a potential of USD 70 billion of asset creation during FY20-25 has provided impetus for stepping up infra investment.
The survey said despite being one of the fastest-growing sectors that contributes significantly to the economic growth, the Indian construction sector continues to face a number of challenges, like supply chain disruptions, escalating energy costs, material and labour cost and shortage of skilled workers.
However, aftereffects of Covid-19 are evident with 51 per cent of the respondents mentioning that their projects have experienced a schedule delay or cost impact of more than 20 per cent due to Covid.
"The industry continues to struggle with poor project performance with 39 per cent of respondent reporting that they have missed the budget/schedule performance targets by 20 per cent, over the past year due to lack of effective risk management," the survey said.
Survey respondents include 119 senior leaders and CXOs representing infrastructure / project owners, engineering & construction firms, and the government, all charged with implementing construction programmes and projects.