ISLAMABAD: Pakistan’s construction sector has emerged as one of the key drivers of economic recovery, registering a robust growth of 5.73% during FY2025-26, a remarkable turnaround from the modest 1.14% expansion recorded in the previous fiscal year. The figures were disclosed in the Pakistan Economic Survey 2025-26, released by the Ministry of Finance.
The significant acceleration in growth has been attributed to improved macroeconomic conditions, a stable exchange rate, declining inflation, and a notable rise in private investment, which surged by 12.8% during the same period. These combined factors created a more conducive environment for developers, contractors, and investors to expand their activities across the country.
The construction sector holds strategic importance in Pakistan’s economy owing to its deep linkages with more than 40 allied industries, including cement, steel, glass, ceramics, paints, electrical equipment, and transport services.
The sector’s upward trajectory consequently provided a significant boost to broader industrial performance. The industrial sector expanded by 3.51%, while large-scale manufacturing recorded an impressive growth of 6.11% during FY2025-26.
Demand for key construction materials, particularly cement and steel products, also rose considerably, reflecting the heightened pace of building and infrastructure activity across urban and semi-urban areas.
Pakistan’s growing population, which reached approximately 252 million in FY2025-26, has further intensified demand for housing, transportation networks, and urban infrastructure, providing sustained momentum to the sector.
Additionally, construction remains one of the highest-employment sectors in the economy. Its extensive supply chain supports skilled, semi-skilled, and unskilled workers, while also creating business opportunities for contractors, suppliers, and transporters.
Analysts view the sector’s strong performance as a positive indicator of broader economic stabilisation, noting that continued investment in infrastructure and housing will be critical to sustaining this growth trajectory in the years ahead.
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