What the Economic Survey 2024-25 Reveals for Construction and Real Estate

The Economic Survey for 2024-25 is optimistic for the construction and real estate sectors, which are post-pandemic resilient and growing. Construction has been a clear outperformer with big-time traction since mid-FY21 and going an approximate 15% above the pre-pandemic trend. This significant growth has been driven by both robust infrastructure development and surging housing demand, underlining the sector’s importance in India’s economic recovery.

Meanwhile, the utility segment, which encompasses electricity, gas, water supply, and other similar services, regained its pre-pandemic position by the end of FY23 and has remained ahead ever since. This recovery highlights the significance of basic services in maintaining economic stability and promoting further industrial and residential growth.

While construction activity has expanded, manufacturing is steadily recovering though yet to climb back to the trajectory that it had before the pandemic. Mining lags at the same time and reflects difficulties in recapturing its pre-COVID momentum.

The economic survey for 2024-25 has registered quite remarkable strength, particularly in terms of construction and real estate, which were one of the biggest casualties of the pandemic.” Construction has been the biggest performer so far, gaining quite a lot of momentum since mid-FY21 and going up by an impressive 15 percent above its pre-pandemic trend. Strong infrastructure development and high housing demand have marked this impressive growth, manifesting the sector as the fulcrum of India’s economic recovery.

Meanwhile, the utilities segment, which includes electricity, gas, water supply, and other similar services, regained the pre-pandemic position at the end of FY23 and has been ahead since then. This is quite significant as basic services form an important aspect of maintaining economic stability and further promoting industrial and residential growth.

While construction activity has expanded, manufacturing is steadily recovering though yet to climb back to the trajectory that it had before the pandemic. Mining lags at the same time and reflects difficulties in recapturing its pre-COVID momentum.

The report also sheds light on the broader economic landscape. Financial, real estate and professional services have emerged as strong leaders, surpassing pre-pandemic trends by the close of FY23. Public administration, defense, and other services marked a significant recovery milestone by exceeding pre-pandemic levels for the first time in Q1 of FY25.

However, not all sectors have rebounded at the same pace. Trade, hotels, transport, and communication services key contact-intensive industries are still gradually catching up. These sectors faced severe setbacks due to lockdowns, restricted travel, and reduced demand for hospitality and entertainment during the pandemic. Their slower recovery highlights the lingering effects of COVID-19 on consumer behavior and service-based industries.

In essence, the Economic Survey paints a picture of a dynamic, uneven recovery, with construction and real estate leading the charge as engines of growth. The findings underscore the critical need for targeted policy support to ensure balanced development across sectors and sustain the momentum in high-performing industries.