The construction industry continued to perform at a subdued level in July 2023, recording a Total Activity Index value of 43.2. As per the respondents, most firms remain hibernated amid the challenging industry environment. However, the gradual decline in material cost had provided a conducive environment for the limited ongoing projects. Further, some temporarily suspended government-funded projects resumed at a modest scale during the month.
The New Orders contracted, yet at a slower rate in July. Many respondents highlighted that tendering opportunities are mostly limited to foreign-funded projects, while private clients are still waiting for further reductions in cost. Moreover, sub-contract openings are also scarce as firms with projects in hand possess extra capacities. Meanwhile, Employment decreased further during the month since firms tend to retain only the key staff. Further, Quantity of Purchases continued to decline during the month as most of the firms are in a wait-and-see stance, only fulfilling the short-term requirements. In the meantime, Suppliers’ Delivery Time broadly remained stable during the month, and some respondents mentioned that supplier credit facilities are also becoming available.
The sentiment amongst the firms towards the next three months broadly remained positive, mainly due to the expected recovery in the economy, the decrease in interest rates and material costs, and current negotiations on the recommencement of suspended governmentfunded projects.