Bangladesh Construction Market
The Bangladesh construction market size was valued at USD 30.38 Billion in 2023 and is projected to reach USD 49.98 Billion by 2031, expanding at a CAGR of 6.42% during the forecast period, 2023 – 2031. Due to increasing urbanization and commercialization in the country. The growth of the market in the country is attributed to the expansion of the construction industry in recent years.
Bangladesh, being the world’s eight most densely populated country, has developed a well-structured construction market owing to the rise in population and the requirement for residential infrastructure. The government extensively invests in the development of healthcare units, residential sectors, transportation infrastructure, and industries. Governments and private construction businesses build various units and buildings in Bangladesh for serving different purposes, residential and commercial.
The Bangladesh construction market was hampered due to the outbreak of Coronavirus. All infrastructural and construction projects came to a standstill and were hanging in a purgatory due to insufficient funds and social distancing to prevent the spread of the virus. Except for a few government projects, commercial projects were halted. A significant portion of raw materials is imported from other countries, the outbreak paused imports, leaving construction businesses without materials and funding.
Bangladesh Construction Market Segment Insights
High demand for residential apartments and buildings drive the market
Based on sectors, the Bangladesh construction market is segmented into residential, commercial, industrial, transportation, energy, and utilities. The commercial sector includes institutions such as factories, shops, business units, and offices. Utilities include healthcare units, educational units, electricity, water, and others. The residential segment holds a dominant share of the market and this trend is expected to continue during the forecast period.
Rising population in Bangladesh and increasing urbanization and development activities are fueling the demand for residential buildings. The commercial and industrial segments are growing rapidly due to the establishment of several manufacturing plants in the country. Cities in Bangladesh are being developed in suburbs and suburban areas, away from urban areas due to congestion and high density of population. Additionally, increase in the income of the middle class population is boosting the demand for residential real estate in the country.
Bangladesh Construction Market Trends
Bangladesh is witnessing huge growth in the infrastructure sector due to the construction of megaprojects that are spread across the country. For the fiscal year 2022, the Bangladesh government proposed a budget worth BDT 603,681 crore (USD 72.42 Billion), and BDT 225,324 crore (USD 26.28 Billion) is allocated for Annual Development Program (ADP).
The Annual Development Program (ADP) includes the construction of some major projects nationwide, such as Rooppur Nuclear Power Plant, Matarbari ultra-supercritical coal-fired power plant, Padma Bridge, Hazrat Shahjalal International Airport, etc. The government aims to establish an integrated and undisturbed communication network through these mega infrastructure projects.
The Padma Bridge is a multi-purpose road and railway bridge over the Padma River in Bangladesh. It is the largest bridge in Bangladesh and the first fixed river crossing for road traffic. It connects Ruhajon, Munshiganj, Shariatpur, and Madaripur and connects the southwestern part of the country with the northern and eastern regions. It was open to the public on June 2022. Bangladesh's first tunnel beneath the Karnaphuli river is still being built. Despite being affected by a labor shortage and a lack of construction materials during the COVID-19 period, 70% of the work has been completed.
Bangladesh Construction Market News
October 2022: Construction of Dhaka's 31.24 km MRT Line 1, Bangladesh's first metro, is due to start in December 2022. A contract for project construction monitoring services has been signed by the Dhaka Mass Rapid Transit Business (DMTCL), the metro project's executing agency, and a Japanese joint venture company led by Nippon Koei. The consortium also includes Oriental Consultants Global, Systra, Delhi Metro Rail, Nippon Koei India, Katahira and Engineers International, Development Design Consultants, and Nippon Koei Bangladesh.
February 2022: The construction arm of Larsen & Toubro has secured an order from the Bangladesh Hitech Park authority to construct Hi-Tech IT Parks at eight locations (two packages at four locations each) across Bangladesh. This project is being funded by the Indian EXIM Bank and is the first IT & Office Space order that L&T has secured in Bangladesh. The primary scope of work for the project comprises the procurement and construction of seven-storied structural steel buildings at all eight locations with BUA of 1.2 million square feet, including civil, finishes, façade, and electromechanical works with LEED Gold rating. The scope includes heating, ventilation, and air conditioning (HVAC), lift, electrical, fire fighting systems, public health engineering, networking & security systems, building management systems, site development, road, boundary wall, landscaping, arboriculture, etc. The project locations are in the Rangpur, Natore, Jamalpur, Mymensingh, Dhaka, Khulna, Gopalganj, and Barishal districts of Bangladesh. The project is scheduled to be completed within stringent timelines.
Public segment held substantial market share in 2020
On the basis of end-users, the market is bifurcated into public and private. The public segment is projected to hold a key share of the market owing to high government expenditures on infrastructural projects and construction equipment. The expansion of the construction sector in Bangladesh is a key factor boosting the economy in the country and one of the determinants of the country’s GDP.
The Executive Committee of National Economic Council of Bangladesh approved two mass rapid transit projects that were worth USD 10.8 Bn. The private segment includes autonomous construction businesses owned by stakeholders or a group of businessmen. This segment is rapidly growing in Bangladesh, as private construction firms are undertaking many residential projects to increase their market share.
Material handling segment to grow during the forecast period
In terms of construction machinery, the Bangladesh construction market is segregated into earth moving machinery, material handling machinery, and concrete & road construction machinery. The material handling segment is projected to register the largest share of the market due to large infrastructure and commercial projects that necessitate material handling. Automation of material handling machinery and presence of the wide number of engineering and construction projects fuel the demand for material handling equipment. Additionally, the concrete and road construction equipment is expected to grow, in terms of revenue, due to increased government expenditure on transportation infrastructure.
Competitive Landscape
Key players in the Bangladesh Construction Market include Mir Akhter Hossain Limited; Development Design Consultants; Build Trade Engineering Ltd; Mazid Sons Construction Ltd; and Western Engineering Pvt Ltd. These players are engage in mergers & acquisitions, collaborations, agreements, and partnerships to increase their market share.