Construction in Pakistan - Key Trends and Opportunities (H2 2021)

The construction industry in Pakistan is expected to grow by 5.3% in real terms in 2021, following a 7.1% growth in 2020; this is an upwards revision of our previous projection of 3% growth this year. The upward revision is mainly due to increased investment in the construction industry, as well as strong export growth and increased manufacturing activity. According to Ministry of Information and Broadcasting, the federal and provincial governments approved construction projects totalling PKR1 trillion (US$6.1 billion) as of July 2021.

According to the provisional estimates of the Pakistan Bureau of Statistics (PBS), public Gross Fixed Capital Formation (GFCF) in construction grew by 18% in the financial year (FY) 2021 (July 2020-June 2021), owing to increased infrastructure investment by the Lahore Development Authority and Capital Development Authority. The GFCF in Transport & Communication increased by 230%, due to increased expenditure by the Pakistan Civil Aviation Authority, National Highway Authority, Port Qasim Authority and the National Logistics Cell. Overall, GFCF increased by 13.8% in FY2021. According to the State Bank of Pakistan (SBP), the amnesty scheme and the government subsidy has led to growth of 84% in housing and construction finance in FY2021, with the total outstanding to the sector reaching PKR305 billion (US$1.9 billion) in September 2021, rising from PKR166 billion (US$1 billion) in September 2020. This includes subsidized loans worth PKR78 billion (US$479.6 million) allotted under the government’s project Mera Pakistan Mera Ghar (MPMG), which aims to provide affordable houses to low- and middle-income groups.

The publisher expects the industry’s growth over the forecast period to be supported by the government’s goal of implementing infrastructure development announced in the budget. In its PKR8.48 trillion (US$52.1 billion) Federal Budget for FY2021-2022, the government allocated PKR91.9 billion (US$565 million) for education and services, PKR34.6 billion (US$212.7 million) for housing and community amenities, PKR28.4 billion (US$174.6 million) for healthcare, PKR26.7 billion (US$164.2 million) for construction and transportation and PKR20.8 billion (US$127.9 billion) for the fuel and energy sector.

The industry is expected to register an annual average growth of 5.1% between 2022 and 2025, supported by investment on China-Pakistan Economic Corridor (CPEC) infrastructure projects. Growth will also be supported by investment on the transport, electricity, housing, telecommunication and industrial infrastructure projects. In June 2021, the government announced a strategy to improve water availability and expand the share of hydel power in the National Grid by establishing ten megaprojects in the water and hydropower sectors from 2023 to 2028-2029. To support industrialization, the government is creating Special Economic Zones. Moreover, to address the housing shortage, the government aims to build five million housing units between 2019 and 2023.

The publisher’s Construction in Pakistan - Country Briefing (H2 2021) report provides detailed market analysis, information and insights into Pakistan’s construction industry, including:

• Pakistan’s construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Pakistan’s construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Pakistan. It provides:

• Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Pakistan, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using the publisher's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using the publisher's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.