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The Construction Sector in
Egypt - September 2003
Members: LE 100, Non-members: LE 200, Int'l Price: $ 200, Students:
LE 100
(Report Cover in PDF)
(Summary and Contents in PDF)
(Sample Pages in PDF)
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| The construction sector is one
of the most dynamic sectors in the Egyptian economy and has
been growing rapidly since the 1980s. In 2000, the Egyptian
construction market ranked 36th in the global construction market,
constituting 0.4% of this market, for a value of $12.711 billion.
Despite its fall from its 1998 ranking of 33rd, the Egyptian
construction market actually increased in size by 23%. |
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The sector has a significant impact on GDP, employment and investment.
In 2001/2002 its GDP share reached a value of LE16.56 ($3.84)* billion,
representing 4.7% of the total GDP. It also employed 8.3% of the
workforce in the same year. Construction investments reached LE41.2
($9.5) billion in 2001/2002 which represents 48.2% of the country’s
total investment. The development and competitiveness of the Egyptian
construction sector in the local and international markets is affected
by factors that can be classified under five main categories: construction
companies, government policies and strategies, available resources,
institutional backing and supporting industries. Modifications and
developments within these categories will lead to further growth
and greater competitiveness for the sector.
Official forecasts indicate that the Egyptian construction sector
is expected to experience higher average annual growth rates, at
8.3%, than those of the total GDP (7.4%) and of the total commodity
sector (7.8%) during Egypt’s fifth five-year plan from 2002/2003
through 2006/2007. The forecasted total investment in construction
for that period is LE257 ($59.24) billion.
SECTOR HIGHLIGHTS
- Housing and utilities absorb the bulk of construction sector
investments in Egypt.
- Construction investments doubled during the last five years
to support the government’s intensive development strategy.
- Privatization increased the private sector’s share in
construction investments by almost 30%.
- Financing and financial regulations are the main obstacles
to the growth and development of the construction sector in Egypt.
- Egypt has committed to the liberalization of most construction-related
service sectors under the GATS.
- Building materials comprise on average 40-60% of the total
cost of a construction project.
- Mainstream privatization activity in the cement sector began
in 1999 starting with the sale of Beni Suef Cement Company.
- The private sector currently dominates 68% of local cement
production.
- Around 95% of steel production in Egypt is currently contributed
by the private sector.
- Best prospects for U.S. companies in Egypt exist in several
specific construction services.
- Considerable opportunities exist for exporting cement and steel
to the U.S. market.
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