The real estate sector and its subsectors are struggling to maintain their growth due to the economic slowdown induced by the coronavirus pandemic, exemplified by a slump in earnings by most of the listed companies connected to construction.

Cement makers fear that their sales tally for the first half of 2020 would showcase a fall of almost 45 per cent whereas the value was 50 per cent for paint producers as the construction sector was hit hard alongside the economy, according to industry insiders.

Heidelberg Cement Bangladesh and RAK Ceramics (Bangladesh) plunged into losses while LafargeHolcim Bangladesh booked slightly higher profits in the last six months compared to the same period the year before with cost cuttings.

Listed paint manufacturer Berger Paints also expects its sales to witness a reduction.

The real estate sector is one of those that have been impacted mostly from the pandemic and the impact is long-term, said Alamgir Shamsul Alamin, president of the Real Estate & Housing Association of Bangladesh (REHAB).

"Because the real estate sector is interconnected with mental, economic and political stability, when all these factors are smoothly at play, people tend to invest here."

The real estate sector deserves incentives from the government because connected to it are almost 250 subsectors, all of which have been impacted along with more than 40 lakh of their employees due to the contagion, Alamin said.

Heidelberg's earnings per share downed to Tk 2.54 in the negative in the January-June period of 2020 whereas it was Tk 2.69 in the same period last year.

Meanwhile for RAK, the corresponding figures are Tk 0.09 in the negative and Tk 0.80, according to the Dhaka Stock Exchange (DSE) data.

The Covid-19 situation is an unprecedented challenge which has impacted operations, so sales dropped, said Rajesh Surana, chief executive officer of LafargeHolcim.

The company's net sales dropped to Tk 776.9 crore whereas it was Tk 970.4 in the same six months last year, according to the company's data.

However, thanks to cost reductions, its profits rose to Tk 84.3 crore, which was previously Tk 79.4 crore.

"The company has been able to generate online orders even during the lockdown thanks to our investments in digital platforms," he said.

"We have also been successful in taking several initiatives quickly towards cost reduction and efficiency improvement projects," Surana added.

The pandemic's impact was clear on the ceramic industry too.

"Due to the Covid-19 pandemic, there was a countrywide lockdown in Bangladesh since March 26," said the RAK in its price sensitive information published in the DSE website.

"(This)…caused the closure of outlets or stores of the company's dealers, suspension of production in the factory and disruption of supply chain which caused a reduction in sales."

The ceramic maker's net sales dropped to Tk 197 crore whereas it was Tk 292 crore in the same period the previous year.

The paint industry is also witnessing lower profits in the April-June quarter along with other construction-related sectors.

The pandemic also had a detrimental impact on the paint industry as the construction industry has screeched to a halt owing to the general leave, said Mohsin Habib Chowdhury, senior general manager for sales and marketing at Berger.

The overall demand for paints plunged by about 50 per cent, he recently told The Daily Star in an interview, adding that the last quarter of the year would be better than the April-June quarter.

"We all should be prepared mentally for 2020 to be the worst year for the painting industry and the construction sector as GDP growth rate is going down and these sectors are positively related to the growth rate," Chowdhury added.

The World Bank projects that Bangladesh's gross domestic product is likely to witness a mere 1 per cent growth in fiscal 2020-21, which was more than 8 per cent in 2018-19.

It was expected that most listed companies, especially construction related ones, are going to post losses or lower profits for the last quarter due to the shutdown of economic activities, said Shahidul Islam, chief executive officer of VIPB Asset Management Company.

The asset management company manages more than Tk 160 crore of assets, which is mostly invested into listed stocks.

The thing that gives hope is that the economy's wheels are starting to run and companies are bouncing back well ahead of what was expected, he said.

However, the construction companies may bounce back slower than others, Islam said, adding that the next dry season may be that of a resumption for them.

A number of REHAB members have already started their construction activities following the lifting of the general holiday at the end of the May, said Alamin, who is also the managing director of Samsul Alamin Real Estate Company.

Although most of the REHAB members are opening their project sites gradually, the progress is not that good as many labourers are yet to return to work, he said, adding that the situation would turn better once a vaccine became available.

In response to a question, Alamin said around 30,000 flats were under construction at present but development had been impacted for which the handovers would be delayed.

If the government wants to revive the vibrant economy then it should invest in the real estate and construction sectors as is done by all countries as infrastructure development leads to the generation of a huge number of jobs, Alamin added.