Engineering & Construction Sector Check - Government Spending Slows As Orders Pick Up In December: Systematix
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Systematix Research Repo
This report is a monthly update on project tendering and awarding activity in the infrastructure space, high-frequency macro data and government capex. We assess the trends witnessed in December 2021 below.
Tendering activity in Dec-21 was up 17% YoY, while trailing-twelve-months tenders were up 22% YoY on a low base. In FY19, the average monthly run-rate of tender value was Rs 765 billion, which declined to around Rs 584 billion thereafter. In comparison, Dec-21 tenders were at Rs 1.02 trillion.
Over the past 12 months, the tender pipeline has been strong for roadways (up 28% YoY), community services (up 30% YoY), water supply (up 12% YoY) and hospitals (up 75% YoY), while railways (up 6% YoY) and irrigation (down 12% YoY) are amongst the large sectors that have disappointed.
The awarding activity in Dec-21 was up 6% YoY, while on a trailing-twelve months basis, awards were up 54% YoY and about 12% higher than FY19, as the base effect continued to benefit comparisons.
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