EXCON 2023: Showcasing Construction Industry’s Resilience and Vibrancy
The Indian construction industry is fast catching up with global trends like digitalisation and ESG considerations. Today, construction companies across the world have placed environmental sustainability on top of their priority list and have consequently incentivised developers and construction companies in India to adopt ESG related considerations, given that the construction industry is a major polluter.
However, taking measures to mitigate carbon emission and pollutants are tied to the cost and availability of capital. In India, we need robust policies and a regulatory framework and, more importantly, the intent to implement them. Attractive incentives by the government will attract the construction industry to incorporate ESG principles into their planning and operations, use more environment-friendly materials and construction techniques, and develop machines that emit low carbon dioxide and other toxic pollutants.
Leading global brands present in India have driven the adoption of advanced technologies and modern manufacturing and construction methods. Today, integrated project management, data analytics, prefabrication solutions, building information modelling, and digitalised solutions are bringing significant gains in efficiency with timely delivery of projects. Yet, there still remains a wide scope for the industry to transform by making further advancements.
Digital technologies are being promoted, encouraged, and deployed by forward-looking companies to make construction sites more efficient and less hazardous for workers. Data analytics is enabling companies to predict machine performance and thereby take timely measures to prevent machine downtime and mishaps at construction sites. Offsite fabrication and modular construction are becoming more widespread due to digitalisation, which is making the processes more efficient and cost-effective by integrating the designing, manufacturing, and assembling processes seamlessly.
A notable shift in the construction industry is the shift from upfront equipment ownership to rentals. Builders, developers, and contractors are taking a mixed approach by combining equipment ownership with rentals based on their project needs, timelines, and budget. This shift is propelling the rental industry’s growth and even prompting some OEMs to diversify into this space - a move that has sparked unrest among rental companies in view of the competitive advantage that OEMs would have over them.
Another emerging trend is the online marketplace for construction equipment rentals, used equipment sale/purchase, building materials, and online availability of allied services. Such platforms offer builders and construction companies an affordable alternative. These start-ups are gaining traction by connecting equipment owners with contractors, and streamlining the leasing, sale & purchase process. No doubt, startups with their disruptive technologies can bring more innovations and new practices in the industry.
For the past few years, India’s infrastructure construction industry has been doing well, and the future looks promising. The government’s focus is not only on developing world-class infrastructure, but also on timely delivery of projects. Roads and railways will be pivotal drivers of sustained growth in the industry. The growth momentum can be gauged by the phenomenal pick up in sales of construction equipment. Defying traditional seasonal cycles, the CE industry is seeing uninterrupted growth over the past seven to eight quarters and this upward trajectory remains resilient, despite national and international challenges, heavy rains, fluctuations in steel and cement prices, compliance with BSIV emission norms, the Russia-Ukraine conflict, unrest in Israel/Middle East, and shifts in US Federal rates, among other challenges.
The CE industry’s momentum in the first two quarters of this fiscal year, with a growth rate of 18% and 31%, respectively, suggests that FY24 is poised to set new sales records of ~1,25,000 to 1,30,000 units, which would be a remarkable 20% increase over FY23.
Fuelled by policy reforms and substantial government spending on key infrastructure projects, India’s aim to become the world’s second-largest construction equipment producer by 2030 could well be within reach. Today, demand for construction equipment is not being solely driven by internal factors but is also being bolstered by exports. ‘Make in India’ equipment now reaches over 140 countries. As export opportunities expand, manufacturers are striving to meet global standards by developing tech-rich machines and with low environmental impact.
As we look ahead to FY25, industry leaders and analysts anticipate a brief slowdown due to the general elections in the first quarter of the next fiscal due to a temporary deceleration in decision-making and fund availability. But the next 10 years is expected to be the golden period for the CE Industry.
Optimism in the infrastructure construction and equipment industry is rife as CII anticipates welcoming over 80,000 trade visitors from across India and South Asian countries at EXCON ’23, which is fully sold out and has a long waitlist.
Exclusive interviews with over 100 exhibitors for our EXCON show preview issue, reveal a line-up of innovations, new equipment launches, technological advancements, including more advanced telematics, GPS and IoT-based solutions, and eco-friendly electric and hybrid vehicles. So, expect to see all of these and more at the indoor and outdoor booths when EXCON opens its doors on December 12, 2023.
NBM&CW, the sole official publication of EXCON, invites all the attendees and participants to Stall A 18 in Hall 1 for a discussion on the industry over a cup of hot coffee.
S.A.Faridi
Managing Editor
NBM&CW - December 2023
