BMI View: Eg ypt has a significant infrastructure deficit, creating demand for sustained investment across a number of sectors including, in particular, power capacity and social housing. Government support for public-private-partnerships (PPPs) is increasing and we are seeing a greater number of foreign firms taking an interest in the market, in conjunction with an influx of regional development funding and foreign financing. There are some potential downside risks to our currently positive forecasts, including the potential for a deterioration in the security environment in Egypt, which could deter investors, particularly in the large tourism sector.
Latest Updates And Structural Trends
Economic growth in Egypt is slowing and we hold below consensus forecasts for GDP growth in the country, with a forecast of 2.6% expansion in 2016 as a result of slow recovery in the tourism industry, high levels of fiscal debt and limited growth in consumption. The infrastructure project pipeline remains strong, however, and we are maintaining our current forecast for growth of 7% in construction industry value in 2016.
One sector which is attracting considerable investment is renewable energy, particularly solar power. Several projects have recently been announced, including a 50MW solar power plant in Aswan, a 40MW solar power plant in South Sinai and a further 2GW of solar power plants in Aswan, Luxor, Salloum and Mersa Matruh.
Egypt continues to record a substantial housing shortage. One project which has been completed is that of 1,560 residential units in Egypt's New Tiba city. A further set of 5,352 housing units are also being built in the city which will include two playgrounds and a 52,609.1 sq m youth centre. A power grid will be set up for the housing units, the first phase of which will be built on 1.94sq km. The second phase of the grid will cover an area of 2.51sq km and is being installed at a cost of EGP52.9mn (USD5.9mn). A EGP33.2mn (USD3.7mn) sewage treatment plant with capacity of 5,000 cubic metres per day has also been built as part of the city.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Construction industry value, EGPbn||118.04||136.86||156.02||174.75||192.30||209.09|
|Construction Industry Value, Real Growth, % y-o-y||9.70||6.95||6.50||6.00||5.55||4.73|
|Construction Industry Value, % of GDP||5.2||5.4||5.5||5.5||5.6||5.7|
Egypt performs below average for the region in our Infrastructure RRI for the Middle East and North Africa, ranking 9th out of 14 countries, with an overall score of 52.1 out of 100.
The country scores only 47.5 for Industry Rewards, below the regional average of 51.6. This is mainly due to low capital investment as a percentage of GDP.
Egypt achieves a weak Country Risks score of 53.8, mainly due to widespread corruption and limited institutional capacity to process tenders and permits in a timely manner.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Egypt Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Egypt Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Egyptian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Egypt to test other views - a key input for successful budgetary and planning in the Egyptian infrastructure market.
- Target business opportunities and risks in the Egyptian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Egypt.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.