Construction Sector Wages Increase 1.63% Amid Ongoing Projects

The Salary and Wage Index (SWI) reveals that wages in Nepal’s construction sector rose by 1.63% in FY 2024/25, with the index climbing from 100.52 in July 2024 to 102.16 in July 2025. While this growth is modest compared to the national average of 2.63%, it reflects the steady role of construction in sustaining employment and wage growth, particularly through ongoing public infrastructure projects such as highways, hydropower, and urban development, along with private housing demand.

Despite contributing significantly to job creation, construction wage growth lagged behind faster-rising sectors like agriculture (+4.78%) and information & communication (+4.35%). This slower pace indicates that the sector is operating under cost pressures, with contractors and developers facing challenges from volatile material prices, tight financing, and project delays. As a result, wage increments remain cautious, ensuring businesses stay competitive while still offering some relief to workers.

For construction workers, the modest increase provides limited improvement in purchasing power, especially in urban areas where living costs are rising. For employers, it signals the balancing act between retaining labor and controlling costs, with sustainability hinging on project completion timelines and government investment flows.