In real terms, the Egyptian construction industrys output grew by 10.3% in 2016, following an average annual growth of 5.3% during the preceding four years. This increase can be attributed to public and private sector investment in infrastructure and residential construction projects, leading to an increase in demand for the Egyptian construction industry.
The construction industry is expected to continue to expand strongly over the forecast period (2017-2021), with investments in infrastructure, residential and energy projects continuing to drive growth. According to Timetric, the focus on the development of transport infrastructure and the construction of affordable housing units will be key growth drivers. In 2016, China announced plans to invest EGP152.3 billion (US$15.0 billion) to develop infrastructure in Egypt. Plans to increase the countrys energy production are also expected to support investments in energy infrastructure projects over the forecast period.
In a bid to promote sustainable economic growth and attract new investments, Egypts parliament approved the New Investment Law in May 2017. Under this new law, the government will provide tax incentives and guarantees, liberalize the foreign exchange system and adopt comprehensive value added tax (VAT) systems to attract more domestic and foreign investment into the country. The move is expected to increase the pace of foreign investment, aiding the growth of the construction industry over the forecast period.
Timetric expects industry output to record a compound annual growth rate (CAGR) of 8.03% in real terms over the forecast period, compared to 7.45% during the review period (2012-2016). However, political uncertainty and a high budget deficit present major downside risks to the forecast.
This report provides a comprehensive analysis of the construction industry in Egypt. It provides:
Historical (2012-2016) and forecast (2017-2021) valuations of the construction industry in Egypt using construction output and value-add methods
Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
Detailed profiles of the leading construction companies in Egypt
Timetrics Construction in Egypt - Key Trends and Opportunities to 2021 report provides detailed market analysis, information and insights into the Egyptian construction industry, including:
The Egyptian construction industry's growth prospects by market, project type and construction activity
Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the Egyptian construction industry
Profiles of the leading operators in the Egyptian construction industry
Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies.
Assess market growth potential at a micro-level with over 600 time-series data forecasts.
Understand the latest industry and market trends.
Formulate and validate strategy using Timetric's critical and actionable insight.
Assess business risks, including cost, regulatory and competitive pressures.
Evaluate competitive risk and success factors.
In a bid to promote economic growth, create employment, reduce congestion in Cairo and attract foreign investment, the Ministry of Housing, Utilities & Urban Development, Egypt (MoH) is constructing a new capital city to the east of Cairo. The program involves the construction of a new capital city on a 70,000ha of land over several phases. The EGP456.9 billion (US$45.0 billion) first phase involves the construction of a cabinet building and 12 ministry buildings, a grand conference hall, national convention center, parliament building, a 4,800MW power plant exhibition complex and 15,000 middle- and low-income housing units on 4,410ha of land. Construction works on the first phase are underway, and are expected to be completed between 2020 and 2022.
Timetric expects the infrastructure construction market to grow at a forecast-period CAGR of 23.30% in nominal terms, driven by governments investment in transport infrastructure. In March 2017, the Ministry of Transportation of Egypt announced plans to attract investments worth EGP281.2 billion (US$15.0 billion) in new rail and metro projects across the country. Of the total investment, EGP262.5 billion (US$14.0 billion) will be spent on three high-speed rail line projects - the Cairo to Luxor line, Luxor to Hurghada line and the Alexandria to Cairo line. The government aims to attract more private investments to finance these projects.
Timetric expects that the governments efforts to balance supply and demand for affordable housing will spur the growth of residential construction market over the forecast period. In February 2016, the government announced a plan to construct 656,000 affordable housing units across the country by 2018. The government aims to attract private investors to finance the project. Accordingly, to finance the construction of 450,000 affordable housing units, the Ministry of Housing signed loan agreements worth EGP10.0 billion (US$1.3 billion) with the countrys lenders.
To develop urban transport infrastructure, the European Investment Bank (EIB) approved a loan of EGP3.9 billion (US$212.3 million) in March 2017 to support public transport in Greater Cairo. The loan will fund the Cairo Metro project under the Greater Cairo Transport Master Plan. The project aims to develop sustainable transport infrastructure, reduce urban congestion, boost the mobility of people and services, and support economic growth.
The government plans to increase the share of renewable energy in the countrys total energy mix from 3.0% in 2016 to 20.0% in 2022 and 37.0% by 2035, which is expected to drive the growth of energy and utilities construction market over the forecast period.