Construction fuels jobs revival in rural India, cities struggle

Increased construction activity in rural areas is driving a recovery in India’s labour market instead of cities, services sector and industrial belts.

Of the nearly 12 million net additions to the employed workforce in January, most are helping rural India build houses and roads. The construction and real estate sector in rural India absorbed more than 8.23 million workers in January, showed data from the Centre for Monitoring Indian Economy (CMIE). In comparison, the labour-intensive construction sector in urban India added less than 350,000 people.

A robust revival is seen in housing construction, catering to a mix of pent-up demand and new end-user demand, said Anuj Puri, chairman of Anarock, a real estate consulting and advisory firm. The “impact of the coronavirus-induced lockdowns was not as severe in tier 2 and tier 3 cities as in the larger cities" and these smaller cities and towns are more dependent on their local economies besides government jobs, where job losses were not high

The Knight Frank-Ficci-Naredco Real Estate Sentiment Index survey published on 27 January showed that the real estate sector is set to grow faster in the next six months and the “sentiment" is much higher in east, south and west India (score of 65 to 66) as against north India

The revival in real estate and construction activity in the rural sector is because of greater construction of individual buildings, renovations of existing houses and structures, and rural road constructions, Arup Mitra, a professor of economics at Institute of Economic Growth in Delhi University, said.

“There is a pent-up demand in rural real estate that was held up for several months because of the lockdown. With more people at home because of reverse migration and limited employment opportunities in cities and industrial belts, people are getting engaged in two sectors, in their own firms and in small-ticket real estate and construction work. However, the growth of employment in real estate and agri indicate that informalization is increasing," said K.R. Shyam Sundar, a labour economist and professor at XLRI Jamshedpur

https://www.livemint.com/industry/infrastructure/construction-fuels-jobs-revival-in-rural-india-cities-struggle-11612718038800.html