Construction sector expected to grow by 5% in June

The sector is one of the government’s priorities to revive the economy, according to the MoWHS Minister

As economic activities in the country start to get momentum, the construction sector is expected to grow by 5% in June this year.

Works and Human Settlement Minister Dorji Tshering said that the construction sector is expected to grow by 3 to 5% by this June given the resumption of works in the sector.

“Construction was one of the key sectors last year to contribute to the country’s GDP,” Lyonpo said, adding that due to the Covid-19 pandemic, the performance of this sector dropped to around -20.6%.

Lyonpo shared that the sector is optimistic as consumers rush to complete their purchases that had been stalled because of the prolonged closure of construction works and low development.

However, the construction sector’s share to the country’s overall gross value increased to Nu 18.7bn in 2021 compared to Nu 16.3bn in 2020.

According to the National Accounts Report 2022, construction, mining and quarrying, transport and communication, wholesale and retail trade showed positive GDP growth in the last fiscal year 2021 compared to 2020.

The report highlighted that these sectors were the top key sectors that contributed to the GDP.

“The sector’s contribution to the GDP growth was 0.90% and in 2020 the sector contributed -2.39% to the economic growth,” the report states.

Meanwhile, the second wave of Covid-19 in 2021 is believed to have affected that specific area of the economy, which raises concerns for the current quarter’s growth in the crucial industries.

The construction sector continues to be one of the key sectors of the economy. The sector accounts for an estimated 11.48% of the GDP in 2019 prior to the pandemic.

According to the National Construction Industry Policy – 2018, given the highest potential to generate wealth, employment, and sustainable growth within the framework of GNH, the construction industry has been identified as one of the priority sectors in the revised Economic Development Policy 2016.

Lyonpo said the construction sector is one of the government’s priorities to revive the economy of the country and is expected to grow further this year.

However, as the mining and quarrying industries started functioning, this sectors saw a growth in GDP in the fiscal year 2021. It rose to 2.71% in 2021 compared to 1.10% in 2020.

The mining and quarrying sector had grown by more than 28% last year, after falling to a record low in 2020. The mines and minerals like dolomite, limestone, coal mines, and gypsum, among others, were the main contributors to the growth of the sector.

The gross value added in the current price in the sector was estimated at Nu 5.08bn in 2021.

Tshering Pelden from Thimphu