# Building materials and Construction and infrastructure Construction is the market for cement, concrete, bricks and glass, so building material makers live on the building cycle: housing takes about 69% of India's cement and infrastructure about 21%, and building material prices follow construction activity with a lag of about a quarter. Source page: https://www.materialinsights.org/links/building-materials-and-construction-and-infrastructure/ [Building materials](https://www.materialinsights.org/industries/building_materials/) (industry) and [Construction and infrastructure](https://www.materialinsights.org/industries/construction/) (industry): 5 relationships. ## How they are linked ### 1. Buys from *Physical flow · Strong · Construction and infrastructure buy from building materials* Every structure is made largely of cement, concrete, aggregates, bricks, tiles and glass, so building materials are one of construction's largest purchases. - **₹11.9** of every ₹100 of construction output, all rounds (India 2022) - **₹8.1** bought directly The total excludes steel and other metals, which come from separate industries, so the full materials bill of a project is larger. Most of the purchase is direct, from cement, ready-mix and aggregates producers. Sources: [OECD](https://www.oecd.org/en/data/datasets/input-output-tables.html) ### 2. Industry input *Physical flow · Strong · Building materials to contractors* Contractors cannot pour foundations, build walls or finish buildings without cement, aggregates and bricks; the site rates building materials 4 of 5 for EPC and general contractors. - **4 of 5** criticality for EPC and general contractors - **70 to 75%** of US cement sales going to ready-mixed concrete producers, 2025 Most portland cement is used to make concrete, mortar or stucco, and in the US 70 to 75% of cement sales went to ready-mix producers in 2025, so ready-mix plants sit between cement makers and contractors. Fly ash and ground blast furnace slag are increasingly used to replace part of the cement in concrete and blended cements, which links the industry to power plants and steelworks. Enterprise types that depend on it: - EPC and general contractors: materials (criticality 4 of 5) - Cement, ready-mix and aggregates producers: cement, aggregates, bricks (criticality 3 of 5) Sources: [Material Insights](https://www.materialinsights.org/industries/construction/materials/); [USGS](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-cement.pdf) ### 3. Housing and infrastructure demand *Transition · High in India · Building activity sets cement demand* Cement is used almost entirely to make concrete and mortar for building, so housing starts and public infrastructure spending decide how much the industry sells. - **about 69%** housing share of India's cement consumption - **about 21%** infrastructure share - **470 Mt** India's cement production, 2025, second to China's 1.7 billion tonnes Nirmal Bang expects India's cement demand to grow about 7 to 8% a year from FY27 to FY30, led by housing. World output fell from about 3.9 to 3.8 billion tonnes in 2025 as China's fell from 1.8 to 1.7 billion tonnes, while India's rose from 440 to 470 Mt, so India is now a main source of growth. Sources: [USGS](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-cement.pdf); [The Tribune (ANI)](https://www.tribuneindia.com/news/business/housing-to-remain-key-growth-driver-for-indias-cement-industry-through-fy30-report/) ### 4. Price link: demand-led *Cost and price · Strong · Construction activity leads building material prices by about three months* Building material makers raise prices when construction demand is strong and plants run full, so material prices follow the building cycle rather than lead it. - **0.43** monthly change correlation (US PPI) - **0.86** 12-month change correlation A 12-month correlation of 0.86 means yearly price moves track each other closely, and construction prices lead by about three months, a lead that passes a Granger test. The series are US producer prices, so the timing in India may differ. Sources: [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/industries/building_materials/price-links/) ### 5. Emission targets on cement *Policy · Rising · Carbon rules on cement plants feed into building costs* Making cement clinker releases CO2 from limestone as well as fuel, so India has set emission intensity targets for cement plants, whose compliance costs can pass on to construction. - **186** cement plants listed for greenhouse gas intensity targets in the April 2025 draft - **8 October 2025** final notification of targets for cement and three other sectors, covering 2025-26 and 2026-27 The plants named in the draft include those of UltraTech, Ambuja and Dalmia. The final targets were scaled back pro-rata for the delay, cutting the expected reduction for cement by about 17%. Using more fly ash and slag in blended cement is a main way to lower intensity, which puts the choice of cement type, and its acceptance in construction, at the centre of compliance. Sources: [Global Cement](https://www.globalcement.com/news/item/18681-india-releases-draft-notification-for-greenhouse-gas-emissions-targets); [Down To Earth](https://www.downtoearth.org.in/climate-change/india-notifies-ghg-emission-intensity-targets-for-four-sectors-delay-derails-ambition-further); [USGS](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-cement.pdf) ## For investors ### Key learnings 1. Construction is almost the only market for cement, and housing takes about 69% of India's consumption, so housing activity drives building material earnings. 2. Material prices follow construction activity: the 12-month correlation is 0.86, with construction leading by about three months. 3. India produced about 470 Mt of cement in 2025, up from 440 Mt, while China's output fell, making India a main source of world growth. ### What to track - **Housing launches and sales**: Lead cement volumes by a few months (Quarterly · property consultants, RBI housing data) - **Government capital spending on roads, rail and urban projects**: Drives infrastructure cement and aggregates demand (Monthly · Controller General of Accounts) - **Regional cement prices and capacity additions**: New capacity can cut prices even when demand is strong (Monthly · dealer surveys, company results) ## For policymakers ### Key learnings 1. Public infrastructure takes about 21% of India's cement, so capex budgets directly support the building materials industry. 2. Greenhouse gas intensity targets for cement, notified in October 2025 for 2025-26 and 2026-27, add a compliance cost that blended cement with fly ash and slag can reduce. 3. Infrastructure and housing together take about 90% of India's cement, so public capex and housing policy set the demand that new cement capacity is built for. ### What to track - **Cement and construction price indices**: Show how material costs move with building activity (Monthly · Office of the Economic Adviser (WPI)) - **Emission intensity of cement plants against targets**: Shows compliance cost and use of blended cement (Yearly · Bureau of Energy Efficiency, MoEFCC) ## India India made about 470 Mt of cement in 2025, second only to China; housing takes about 69% of consumption and infrastructure about 21%, and cement plants have had greenhouse gas intensity targets since 2025-26 under the Carbon Credit Trading Scheme. ## Sources 1. [OECD Input-Output Tables 2025 edition, India 2022](https://www.oecd.org/en/data/datasets/input-output-tables.html), OECD 2. [Construction and infrastructure: materials](https://www.materialinsights.org/industries/construction/materials/), Material Insights (2026) 3. [Mineral Commodity Summaries 2026: Cement](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-cement.pdf), USGS (2026) 4. [Housing to remain key growth driver for India's cement industry through FY30: report (Nirmal Bang)](https://www.tribuneindia.com/news/business/housing-to-remain-key-growth-driver-for-indias-cement-industry-through-fy30-report/), The Tribune (ANI) (2026) 5. [Price correlation, Material Insights](https://www.materialinsights.org/industries/building_materials/price-links/), Material Insights (World Bank, FRED, IMF data) 6. [India releases draft notification for greenhouse gas emissions targets](https://www.globalcement.com/news/item/18681-india-releases-draft-notification-for-greenhouse-gas-emissions-targets), Global Cement (2025) 7. [India notifies GHG emission intensity targets for four sectors; delay derails ambition further](https://www.downtoearth.org.in/climate-change/india-notifies-ghg-emission-intensity-targets-for-four-sectors-delay-derails-ambition-further), Down To Earth (2025)