Rise in raw material prices is expected to hit the construction
sector and may reduce its contribution to below eight per cent in the
country's GDP this fiscal, according to a study.
The industry body surveyed about 1,500 people including
contractors, developers, building material manufacturers, traders and real
estate consultants for the study.
The domestic construction industry has been jostling with
steep rise in prices of raw materials including cement, steel rods, bricks and
other input materials which have risen by over 30 per cent since 2009, the
report said.
Besides, the sector is facing a severe shortage of skilled
workers, which has led to delays or cancellation of projects, the survey added.
Further, the study said, an increase in input costs is
mainly due to rising global demand for goods and commodities. Also, increasing
transportation and energy costs are responsible for the hike in raw material
prices, Rawat said.
The majority of the construction material manufacturers and traders, surveyed
by the chamber, said that an increase in raw material cost have forced them to
resort to production cuts, the study said.
Further, it said that about 40 per cent of respondents representing the real
estate firms felt that getting access to capital was difficult as banks had
reduced their lending to realty players.
Source: The Business Line
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