BMI View : We forecast Gabon's construction industry to recover from the recession it entered in 2014 to record moderate growth in 2016 and throughout our 10-year forecast period. Support for projects will stem from international financial institutions and funding flows from China, though we highlight that a wide fiscal deficit and lack of substantial foreign direct investment will hinder the government's plan to tackle its infrastructure deficit and diversify its economy away from oil exports.
Forecast & Industry Developments
We have adjusted our outlook for Gabon's construction industry following new historic data showing a contraction of 4.5% in real terms in 2014. We now estimate the industry contracted by 1% in 2015 as oil headwinds continue to weigh on government revenues. BMI forecasts growth to return to positive territory in 2016, recording 4.5% real growth and expect it to continue to expand over our 10-year forecast period.
Between 2016 and 2020 we project annual average growth of 4.7% in real terms as projects in the transport and power sectors enter construction, supported by loan agreements from international financial institutions and China.
We have maintained our outlook for the second half of our forecast period between 2021 and 2025, projecting annual average growth of 6% in real terms over this period as the improved commodities outlook eases fiscal pressure and enables the government to funnel expenditure into infrastructure development.
The government is actively courting Chinese involvement in its infrastructure sector and has eased regulations for South African businesses travelling to Gabon in order to encourage them to invest in the country.
|f=BMI forecast. Source: BMI|
|Construction industry value, XAFbn||556.63||599.55||647.09||693.03||748.47|
|Construction Industry Value, Real Growth, % y-o-y||4.53||4.71||4.93||4.10||5.00|
|Construction Industry Value, % of GDP||5.9||6.0||6.1||6.1||6.1|
Gabon remains in 15th place out of 17 markets in Infrastructure Risk/Reward Index for Sub-Saharan Africa. Its overall score has dropped to 29.7 from 30.5 and it remains well below the regional average of 39.1, owing to a deterioration in its Industry Rewards score.
Gabon now scores 22.5 for Industry Rewards, down from 27.5 previously. The small size of the infrastructure market in nominal value terms and the government's reliance on oil revenues means its performance is highly vulnerable to external shocks. The underdeveloped financial sector - which makes it difficult to raise financing in-country - and low levels of skilled labour - which raise the cost of doing business - also weigh on its performance in this indicator.
More positively, Gabon's Country Risk score has improved, from 40.9 last quarter, to 48.9 in Q416. The stable political environment and policy continuity, as well as low external threat, have bolstered its performance in this indicator.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Gabon 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 Gabon Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Gabonese infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Gabon to test other views - a key input for successful budgetary and planning in the Gabonese infrastructure market.
- Target business opportunities and risks in the Gabonese infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Gabon.
- 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.