Egypt

The Egypt Construction Market is expected to increase at a CAGR of around 6%. Egypt's building industry has risen tremendously in the previous ten years. Egypt's construction sector did well in FY 2019, accounting for 6.2 percent of the country's GDP. In reality, the industry increased by 8.8 percent in the previous fiscal year, compared to a growth rate of 10% in FY 2018. After a temporary halt due to the COVID-19 epidemic, the industry is expected to increase at a rate of 9% on average between 2020 and 2024. The Egyptian government is a huge investor in construction. Egypt plans to build up to 14 new smart cities across the country. According to the housing minister, Egypt has completed about 1.7 trillion le ($106.25 billion) worth of infrastructure projects in less than two years. The government is also upgrading airports, ports and transport networks. In addition to the egyptian government, the construction sector has also received a boost from international donors and multilateral financial institutions, helping to support growth and make the country more attractive to foreign investment.

The Egyptian construction market is highly competitive and there are many opportunities for private enterprises as the government is taking important steps to support the sector by implementing various low-income housing schemes in partnership with private enterprises. The market is fragmented and is expected to grow during the forecast period, driven by increased construction investment in the country and upcoming major projects as well as a few other factors. Some of the local and international players in the industry are Al-Ahly Development, Talaat Moustafa Group Holding (TMG), The Arab Contractors, Orascom Construction.

Egypt has an overall poor infrastructure with intensive traffic on all modes of transportation and high accident rates. However, Egypt has been heavily spending on the infrastructure in recent years to re-establish the existing infrastructure and even make it more sustainable. According to the Minister of Housing, Egypt completed infrastructure projects worth about LE 1.7 trillion (approximately US 106.25 billion) in less than two years. Egypt has an expansive road network comprising 65,050km and around 181 bridges with around 20 being built in the last 4 years. In lieu of Egypt’s strategic location, it has 36 airports of which 12 have regular scheduled flights and 23 seaports with several new upgrades being constructed with a budget of 4 billion USD by 2024. Egypt has recently been intertwined in a water crisis which has pushed Egypt to heavily invest in new water and wastewater plants with around 28 billion USD being invested into non-Nile dependent water plants. Egypt is also shifting its focus from its current power sources and moving to more renewable electricity.

Egypt has launched a national agenda called ” Egypt Vision 2030” which aims to promote sustainability throughout all fields especially in the construction industry and infrastructure facilities. Plans to increase the share of sustainable power sources in the nation's total energy from 3.0% in 2016 to 20.0% in 2022 and 37.0% by 2035. The Egypt Construction Market is expected to increase at a CAGR of around 6%. Especially with the current plans to develop urban transport infrastructure. The European Investment Bank (EIB) endorsed credit of USD 212.3 million to support public transport in Greater Cairo.

A recommendation for international contractors looking to enter the Egyptian construction market should aim to join forces with a local contractor through a partnership or joint-venture. This helps the international contractor gain expertise about the local Egyptian construction industry’s environment. International Contractors are also advised to keep cautious of the political situation in Egypt as the government is very influential in Egypt. Lastly, parties in the construction industry, whether local or international, are encouraged to enter the Egyptian construction market as it is booming and will continue with an upward trend especially with the heavy investment in infrastructure projects.