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“As a result, many small and mid-level contractors are facing severe financial hardship and may be forced to exit the sector due to a lack of income and work opportunities,” he said.

According to Ahmed, the construction industry is passing through one of its toughest phases in recent years and is unlikely to regain momentum until an elected government takes office and revives development spending.

“The dynamics of the sector have turned negative,” said M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh.

“This contraction is concerning because construction has high entry costs, significant value chain depth, and strong linkages with domestic industries such as cement, bricks, and steel,” he said.

“When the sector shrinks, the economy’s value addition and employment prospects suffer,” he said.

Reaz said multiple factors are driving the slowdown.

Domestic demand has weakened amid broader economic uncertainty, while high inflation has forced the government to cut back on public spending for infrastructure and development, he said.

He further said the monsoon typically halts or delays construction work, as heavy rains disrupt building activities, logistics, and the transport of materials, reducing economic activity in allied industries and creating ripple effects across the broader economy.

The cement industry, deeply tied to the construction sector, is already facing significant headwinds due to political uncertainty and sluggish public spending, said Mohammed Amirul Haque, managing director of Premier Cement Mills PLC.

“The slowdown in construction has already affected employment, economic activity, and government revenue collection,” he told The Daily Star.

He said cement sales have dropped by around 15 percent over the past three months amid reduced public spending.

“While the monsoon typically dampens cement and construction material sales, this year the situation is markedly worse, with construction activities remaining severely limited,” he said.

Haque added that the contraction in construction work has dealt a heavy blow to backward linkage industries that supply raw materials and services essential for construction.

However, he noted that there was one market that was still unaffected.

“Demand in rural areas remains relatively strong, offering some relief to industries connected to the sector,” he said.

According to him, the construction sector is linked to the development of numerous ancillary industries, including those producing steel, cement, tiles, sanitary ware, cables, electrical equipment, paint, glass, aluminium, and bricks.

However, when the construction sector is affected, these subsectors are also impacted, he said.

Haque expressed hope that the sector might rebound once an elected democratic government comes to power and development projects resume in earnest.