Pakistan construction sector to “expand by 92%”
By Catrin Jones14 April 2022
A study by the Pakistan Credit Rating Agency Limited (PCRA) stated that the construction sector is expected to expand by 92% in seven years.
In an overview of the local economy, the PCRA reported that Pakistan saw a growth rate of 6% year on year.
The construction sector contributed almost PKR1,409 billion (US$7.8 million) to the Gross Domestic Product (GDP) of Pakistan in 2021 with a growth rate of 14.4% on a year on year basis.
The majority of construction revenue, says the PCRA, is from government contracts – such as the building of infrastructure, highways, offices and airports.
The report anticipates Pakistan to further improve its ranking with the construction of several megaprojects under the China-Pakistan economic corridor.
Pakistan’s public sector continues to invest heavily into infrastructure projects with the largest apportionment being given for the development of national highways and railways. Under Public Private Partnership (PPP) nine construction and rehabilitation of road and transit projects are in the pipeline.
The report also estimated that the global construction industry was valued at US$13.6 trillion last year and is expected to reach US$15.2 trillon in 2022.
The industry also has a major economic significance on gross domestic profit (GDP) with a contribution of 14.3% in 2021 and is expected to contribute 14.8% in 2022 – it employs an average of 7% of the global labour force.
Asia is reported to have the fastest-growing GDP averaging 4.7% with China’s output contributing 7.1% to the overall GDP of the continent.
An increase in costs saw the prices of primary construction materials rocket in 2021. Bitumen, primarily used in road infrastructure, was reported to have gone up 48.6% whilst timber and softwood prices saw increases between 7% and 11%.