Stable Construction Industry in 2010

There has been a significant increase in asset ownership through build, own, operate and transfer (BOOT) projects last year. Even then, Fitch Rating Agency has commented on the Indian construction sector to be stable for the year 2010 (as the rating agency expects.According to a study by ASSOCHAM, the burgeoning Indian construction industry, currently worth $70 billion, will rise to US$120 billion by 2010.

Ashok Leyland, India’s second-biggest commercial vehicle maker by sales, is all set to make a foray this year into the booming construction equipment segment dominated by players such as Telcon of Tata Motors, JB, Escorts, L&T, Caterpillar and Komatsu.Ashok Leyland CFO K Sridharan told that the joint venture with John Deere to manufacture construction equipment will take off in December this year. The company is setting up a facility near Gummidipoondi and has started testing products in the market. Diversified Hinduja Group on is close to acquire an Indian construction firm in a bid to secure a foothold in India's fast growing infrastructure sector, especially roads, and also announced an investment of USD 10 billion (around Rs 46,200 crore) in the power sector.

Foreign investors have remained bullish on India's housing, real estate and construction sectors in the last two years, undaunted by scarce global financial resources.Foreign Direct Investment (FDI) in terms of inflows into equity in the Indian construction and realty sectors have seen a sharp rise from USD 1.19 billion in April-December 2007 to USD 5.6 billion in the first three quarters of the current fiscal, as per the official data. More over the government allows 100 per cent FDI through automatic route in construction development projects, including housing, resorts, commercial premises, educational institutions, recreational facilities, city and regional level infrastructure and townships. So it is showing a good sign for the Indian construction sector in the year 2010.There is a promising opporunity in building more in the country by which it has immense potential in generating huge amount of employment. It has been found out that construction industry offers employment to around 7% of the total employed work force around the globe.