By Hamid Mahmood ISLAMABAD, Nov. 08 (INP-WealthPK): Prime Minister Imran Khan says construction sector boom has begun in Pakistan throwing a wealth of opportunities for everyone to benefit from. Addressing a property, housing, and construction expo at the Pakistan-China Friendship Centre in September, he said increased demand in the construction industry will benefit the allied industries. Owing to the lockdown to combat the Covid-19 pandemic, the government restricted the infrastructure projects, but authorised the industry to restart operations in mid-April 2020. Pakistan's construction sector is anticipated to grow by 3% in real terms in 2021, following 6.2 percent drop in 2019. Addressing the media recently, State Minister for Information and Broadcasting Farrukh Habib noted that resurrection of the construction industry had brought a tremendous surge in economic activity in the country with an estimated investment of Rs1 trillion. Over the last two years, the construction industry has experienced considerable increase in residential and commercial developments. In April 2020, Prime Minister Imran Khan announced a construction stimulus initiative for the infrastructure industry to increase job opportunities and economic growth. The package includes a fixed tax rate for the construction industry, a PKR30 billion ($191.5 million) subsidy for the Naya Pakistan Homes Scheme, sales tax decrease, and incentives for builders to provide affordable homes. Furthermore, investors in the newly constructed properties would not be obliged to identify their source of income until June 2022. The new legislation cuts advance tax on property transactions from 10% to 5%, eliminates one-time capital gain tax on homes and flats, and imposes zero withholding tax on all building materials except steel and cement under the Naya Pakistan Housing and Development Authority. In comparison to the previous financial year (PKR734 billion to GDP), the contribution of the construction industry grew in FY20 (PKR 794 billion to GDP). Construction activity expanded by 8.1 percent in FY20 as a result of greater government support and increasing private sector investment. Between FY19 and FY20, the private sector's gross fixed capital formation (GFCF) increased by 20.6 percent. Construction industry employs 7.6% of the country's workforce and supports over 42 other industries, including aluminium, brick, cables, cement, fixtures, glass, kitchen and bathroom fixtures, marble, paint, steel, tiles, transportation, warehousing, wood and many others. The Public Sector Development Programme (PSDP) expenditure is the most important demand driver for the construction sector, followed by private investments. Furthermore, the government's assistance packages and subsidies are assisting the industry's expansion. The government's top aim for the year 2021-22 is to boost economic activity even further. As a result, PSDP for FY 2021-22 has increased by 38%, from Rs650 billion in FY 2020-21 to Rs900 billion in FY 2021-22. (Including foreign aid of Rs100 billion). The National Highway Authority's (NHA) current portfolio includes 40 ongoing projects with a PSDP planned cost of PKR179 billion for FY21. Pakistan's road network ranks 22nd in the world, with a total length of 270,971 kilometres. With the building of new megaprojects under the China-Pakistan Economic Corridor (CPEC), the country's rating is projected to increase dramatically. The rush of infrastructural projects, including motorways, power plants and dams, brought by CPEC has boosted the construction sector. Construction of private and residential structures and dwellings is also an important factor, particularly in the rural regions. Residential housing demand is gradually increasing in tandem with the population increase. Source: Ministry of Housing & Works; WealthPK Research Though Covid-19 brought a drop in GDP, public sector infrastructure investment and Foreign Direct Investment (FDI), the future remains bright owing to significant government measures such as restructuring, improving the regulatory environment, and introducing incentives and relief packages. The construction industry's projections are shown in the given graph. Source: Fitch Solutions Construction sector is regarded as the backbone of any economy since it employs a large number of skilled and unskilled individuals. The building industry stimulates its related businesses as well as the economy as a whole. As a result, the federal government, in partnership with the provinces, is working hard to boost economic activity in the country. These government programmes not only help the associated sectors, but also create jobs.