Construction costs in India have seen an 11% increase in 2024, with labour expenses being the primary driver behind the surge. According to industry reports, the rise in wages for skilled and unskilled workers, coupled with the ongoing labour shortages, has significantly impacted overall project costs. This increase has been felt across various sectors, including residential, commercial, and infrastructure projects.
The construction sector has faced ongoing challenges, including supply chain disruptions and higher raw material costs, but labour-related expenses have emerged as the leading factor in the latest price hike. The demand for skilled labour has surged, while the supply remains constrained, further pushing up wages. Additionally, regulatory changes and labour laws have added to the cost burden, contributing to the overall rise in construction expenditure.
The 11% rise in construction costs has placed additional pressure on developers, who are already grappling with inflationary pressures. As a result, many are reevaluating project timelines and budgets, and some are considering passing on the cost increases to buyers.
Industry experts predict that labour shortages and rising wage pressures may continue to affect construction costs in the short to medium term, potentially delaying projects and impacting the affordability of new developments.
