the indian economy & the building sector...management consultancy - market analysis - global...

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IEE EXPO 2016 International Elevator & Escalator Expo 2016 Mumbai, India

The Indian Economy & the Building Sector

Shanker Gopalkrishnan Madras Consultancy Group Chennai, India [email protected]


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The Indian Economy – An overview –

Disclaimer The data and information presented herein have been collated from various primary and secondary data sources by the author and Madras Consultancy Group. This presentation is intended to provide the audience a flavour of the Indian economy and the building sector. The author and Madras Consultancy Group do not accept any direct or indirect legal liability of any kind. This presentation remains MCG’s intellectual property and no part may be reproduced or circulated without the prior permission of Shanker Gopalkrishnan, Madras Consultancy Group, 2nd Floor, MN Plaza, 15/16, 3rd Cross Street, Kasturba Nagar, Adyar, Chennai – 600020, India. Mail: [email protected]


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1224.1

1365.4

1708.4 1843.0 1835.8

1875.2

2051.1

524.1 618.4 721.6

834.2 949.1

1238.7

1224.1

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

0

500

1000

1500

2000

2500

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

2008-14 2002-08

The Indian economy crossed the US $ 2 trillion mark in 2014-15 (at current prices)...

Source: Economic Survey, Planning commission documents; Note:*New series figures from 2011-12

GDP(Current prices) US$ Billion

CAGR (2008-14): 9.0%

CAGR (2002-08): 15.2%


GDP growth rate at constant prices

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7.9 7.9

9.3 9.3 9.8

3.9

8.5

10.3

6.6

5.1

6.9 7.3

0

2

4

6

8

10

12

8.84% 7.45%

7.73%

Source: Reserve Bank of India

In p

erce

ntag

e


India’s export grew strongly to reach US$ 306 billion by 2011-12, but has stagnated since then…

185 178 251 306 300 313 311

304 288

370

489 491 450 448

0

150

300

450

600

750

900

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15*

US

D B

illio

n

Exports Imports

•  Key imports: Petroleum, oil & lubricants (POL), fertilizers, edible oil, iron & steel, plastic materials, precious & semi-precious stones, non-ferrous metal, transport equipment, non-electrical machinery

•  Key exports: Crude & petroleum products (incl. coal), engineering goods, gems & jewellery, chemicals & allied products, ready-made garments, cotton yarn & fabrics,

Source: Reserve Bank of India; * Provisional

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The service sector continues to be the major contributor to the Indian economy…

•  The construction sector contributed around INR 8,180 billion to the country’s GDP in 2013-14; accounting for 7.2% of the total GDP

14%

27% 59%

14%

26%

60%

Agriculture Industrial Service

2013-14

2012-13

Components of GDP at factor cost (Constant prices)

Source: Government of India & Reserve Bank of India

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The growth of Indian population has slowed down over the last few decades….

•  India accounts for 2.4 % of the world surface area and 17.5 % of the world population

•  India’s population witnessed a decadal growth of 17.6% during 2001-2011 (absolute terms: 182 million), a decrease from 21.5% during 1991-2001

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Population & Population density growth trend (Mn Nos & Persons per Sq. Km)

Surface Area 3,287,240 sq. km

Population 1,210 million

Urban population 31.2%

Population density 382 persons per sq.km

Literacy rate 74%

Source: Census 2011

361 439 548

683 846

1,028 1,210

117 142 177 216 267 325 382

0 200 400 600 800

1000 1200 1400

1951 1961 1971 1981 1991 2001 2011

Population Population density


India: Demographic trends (contd.)

•  Over 31% of India’s population resided in urban areas according to Census 2011; rising from 28% in 2001

•  65% of the population is under 35 years of age and over 40% is under 20 years •  The migration to urban areas will be much greater in the decades to come

0%

50%

100%

1951 2001 2011 2021*

82.7 71.4 68.8

66.0

17.3 28.6 31.2 34.0

Rural Urban

Population Growth: Urban vs Rural (%)

* estimate

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Source: Government of India


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The Building & Construction sector in India


Building & Construction sector in India

3,889 4,510 5,004

5,715 6,898

7,600 8,184

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

INR

Bill

ion

Contribution of construction sector to GDP*

•  The construction sector is a leading employment generator next only to agriculture providing employment to around 30 million people (2015)

•  The construction sector contributed around INR 8,180 billion to the country’s GDP in 2013-14; accounting for 7.2% of the total GDP

•  Economic growth and urbanisation have led to a burgeoning demand for urban residential and commercial space

Source: Government of India; *GDP at current price

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Construction Sector

Buildings(52%)

Residential

Non Residential

Commercial Institutional

Industrial

Infrastructure(48%)

Roads, Rail, Dams, Canals, Airports, Power Systems, Telecom systems, Water supply, Sewerage, Drainage

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Building & Construction sector: Key segments

Source: CIDC


Indian cement industry: Overview

•  Cement production stood at 268 million tonnes in 2014-15 reflecting a growth rate of 6.4% per year between 2007-08 and 2014-15

•  Indian cement industry is currently facing a capacity overhang situation and utilisation is around 75% - ideally the companies need to operate at 80 to 85%, or higher

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Cement industry: Trends in production, 2006-07 to 2014-15, (mn. tonnes)

161 174

187

217 210 224

240 255

268

100

150

200

250

300

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Source: Industry data / MCG research


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SMART CITIES – Selection criteria

The Central Government has proposed the development of 100 SMART cities over the coming decade and the Government’s white paper suggests the following criteria for selecting the first 100 smart cities :

ü  One satellite city of each of the cities with a population of 4 million people or more: 9 cities

ü  Most of the cities in the population range of 1 – 4 million people: about 35 out of 44 cities

ü  All State/UT Capitals, even if they have a population of less than one million: 17 cities

ü  Cities of tourist, religious and economic importance not included in above: 10 cities

ü  Cities in the 0.2 to 1.0 million population range: 25 cities

•  The first 20 proposed SMART cities have been named


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Metro Rail/Monorail Projects

•  Metro Rail/Monorail - Operational

Ø  Bangalore, Chennai, Delhi, Gurgaon, Jaipur, Kolkata, Mumbai

•  Metro Rail/Monorail - approved projects - 21

•  Metro Rail/Monorail - proposed projects - 30

Airport Projects

•  Airport expansion projects – 14

•  Airport green-field projects – 17

Infrastructure projects


The Indian Elevator Market

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Data provided in ensuing slides is from our report entitiled “ The Future Of Elevator Market In India To 2018”


Elevator Market in India: Growth trends, 2001-2018 (Nos)

•  Driven by rapid urbanization, rising income and technological developments, the elevator market in India was estimated at 54,200 units in 2013

11,500

46,760 54,200

62,050

1,05,000

0

20000

40000

60000

80000

100000

120000

2001 2012 2013 2014 2018

Mar

ket S

ize

(Nos

) From 54,200 units in 2013, the Indian elevator market is expected to cross the 100,000 units mark by 2020

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Mumbai continues to remain the most important market for elevators in India, followed by NCR

Elevator market estimate by select cities, 2013 (Nos)

Mumbai 13.8% NCR

9.2%

Bangalore 4.6%

Pune 4.6%

Ahmedabad 3.7% Chennai

5.5% Hyderabad 3.2%

Others 55.3%

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The high-rise trend in India has just begun…..

•  With increasing demand for housing and decreasing land availability in urban India, the “high-rise” option is now increasingly accepted by planners as a solution

•  Urbanisation has created a significant demand for housing in India owing to which buildings above 25 floors are now seen dotting the skyline of major Indian cities

•  Increasing cost of land is a major contributing factor

•  Mumbai and parts of the National Capital Region (NCR) are leading the way with vertical growth – other metro cities are fast catching up

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Thank you !

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