This sector is crucial for the economy, contributing significantly to GDP and providing employment opportunities for millions of people. The construction sector in Pakistan is characterized by a high degree of informalization. This means that a large portion of the workforce is employed in unregistered and unorganized sectors.

The construction sector in Pakistan provides direct employment to workers such as site managers, architects and engineers. It also plays a crucial role in providing indirect employment through suppliers of materials (including cement, bricks, steel, paints, cables, sanitary items, bulbs, tubes, fans, air conditioners, etc), transporters, and auxiliary services. A decline in the construction industry significantly impacts industries closely tied to it. For example, manufacturers of cement, steel, wood, bricks, glass and paint experience reduced demand, which can lead to potential layoffs and closures. A decline in construction reduces demand for equipment, affecting suppliers of machinery and tools. Transport and logistics also face reduced activity due to decreased demand for the movement of construction materials.

During a recession or when input costs rise, both new construction and repair/maintenance activities can decline. New construction is typically hit harder as consumers and businesses delay large capital expenditures. Repair and maintenance activities may also decline, though to a lesser extent compared to new builds. People often postpone non-essential maintenance, but critical repairs (such as roof leaks and plumbing issues) still need to be addressed. However, high input costs can lead to cost-cutting in quality and frequency. On average, repair and maintenance activities account for 10-20 per cent of total construction output in various economies. In more mature economies with aging infrastructure, this percentage can be higher.

This guideline is based on the concept of the “30% rule,” which states that housing costs should not exceed 30% of a household’s gross income. The 30% rule is a widely used guideline for determining housing affordability. It is based on the idea that housing costs should not exceed a certain percentage of a household’s income.

This number can fluctuate significantly based on factors such as economic conditions, cultural norms, and family size preferences. In many developed countries, the average household size is smaller than in developing countries. This is often attributed to factors like higher living costs, increased urbanization, and a shift towards nuclear families.