Muhammad Saleem

High-interest rates, political-economic uncertainty and financial instability have contracted the construction industry, panicking the developers, contractors and labour force. Talking to WealthPK, Javed Ahmed, an architect, said inflation, political uncertainty and economic downturn were exacerbating the socio-economic problems. However, he was optimistic that the situation would improve post-Feb 8 elections. "Bank interest rates are high. In this situation, why would people take the risk to invest in the construction, real estate or any other sector? The industry needs a multi-pronged strategy with the state and private sectors on board. Without devising a long-term strategy, we cannot get rid of the current crisis, come what may," he opined. Like Javed, government contractors too are waiting for the good days. Ansar, a government contractor, told WealthPK that state-run projects, construction of roads, streets, flyovers, hospitals etc., had gathered a little momentum due to the steps taken by the Punjab Caretaker Chief Minister Mohsin Naqvi.

However, the overall situation of the construction industry had been down for a couple of months. "Owing to the current uncertainty, scores of contractors are reluctant to take part in the state-run projects, fearing they might lose their hard-earned money when the new provincial government comes to power. "Currently, the construction sector is grappling with myriad issues leaving the developers and contractors with no option but to wait for the best. Such issues hit the economic growth besides creating many problems for the labour," he added. Sketchy information hints that the construction sector experienced a decline of more than 5 percent this year. Allah Ditta Chaudhry, associated with the construction business for more than four decades, is facing constraints these days due to the high rates of raw materials, including iron, bricks, cement and gravel. Talking to WealthPK, he said high raw material rates discouraged the people from going for construction.

Owing to the market condition, the workforce has either reduced wages or switched to alternative ways to make ends meet. The builders have also lowered their profits to keep the business going, but all in vain," he added. Requesting anonymity, an office-bearer of the Constructors Association of Pakistan (CAP) told WealthPK that they had asked the government in November 2021 to intervene, as the construction sector was heading towards a disaster. He said the Association had conveyed this picture due to the rapidly increasing prices of the construction materials. The investors are not ready to trust the builders, as their confidence has eroded due to the ongoing financial and political crisis in the country. The crisis also proved to be a major hindrance to foreign investment, and overseas Pakistanis are also not ready to invest.

Credit: INP-WealthPk