Only 19% skilled workforce employed in India’s construction sector: Report

Owing to the growing demand for real estate and infrastructure, the demand for skilled employees will continue to arise from developers, construction companies, consulting firms, the report added

India's construction sector is the second largest employment generator and as of 2023, 71 million of the workforce is estimated to be employed in the construction sector but 81 percent of this workforce is unskilled and only 19 percent are skilled employees, a report by Knight Frank and RICS has said.

It noted that employment in the construction sector is estimated to grow to 100 million by 2030 to attain economic growth targets.

"Owing to the growing demand for real estate and infrastructure, the demand for skilled employees will continue to arise from developers, construction companies, consulting firms etc whereas the supply of the skilled manpower is to be generated from government initiatives, academic and training institutes," the report said.

Real estate consultant Knight Frank India and Royal Institution of Chartered Surveyors (RICS) in their report, titled 'Skilled Employment in Construction Sector in India', noted that the Indian real estate sector is estimated to grow to $1 trillion by 2030 from the existing $650 billion.

"Owing to the growing demand for real estate and infrastructure, the demand for skilled employees will continue to arise from developers, construction companies, consulting firms etc whereas the supply of the skilled manpower is to be generated from government initiatives, academic and training institutes," the report said.

The pace of economic growth has further widened the scope of expansion of the construction sector in India, which includes real estate as well as infrastructure development to accommodate the growing needs of the economy. By 2030, India’s economy is estimated to be at $7 trillion, propelling a high degree of growth in the construction sector.

In the last 10 years, the output from India’s construction sector – inclusive of both infrastructure and real estate development and services – has grown at a CAGR of 11 percent. The construction sector, along with the output generated from real estate services and ownership of dwellings, contributes 18 percent to the economy’s total output. Additionally, this sector is the second largest employment generator with multiple linkages to the economy, it said.

The output generated from India’s real estate sector is estimated to grow to $1 trillion by 2030 from the existing $650 billion, according to the report. The growth push to the real estate sector is mostly emerging from the residential demand, in addition to commercial, retail, hospitality, and warehousing developments, to cater to demand arising from the growing population.

Between 2012-2022, 2.8 million residential units have been launched across the top 8 cities  in India, translating into 3.1 billion sq ft of residential real estate development. Additionally, there is a stock of 880 million sq ft of Grade A office development and 106 million sq ft of retail real estate inclusive of shopping malls and high streets across the top eight cities in India, it noted.

Business sentiments and conducive policy measures undertaken by the policy makers in the last few years have boosted the investment sentiments of both domestic as well as international investors towards the construction sector in India, it added.