Israel Infrastructure Report

Published 08 January 2015

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Israel Infrastructure Report

BMI View: We currently forecast 2.6% real growth in Israel's construction industry in 2015, following an estimated contraction of 0.4% in 2014. Our forecast is supported by low base effects and a recovery in gross fixed capital formation (GFCF). We maintain our medium-to-long term favourable view of Israel's construction market and we forecast an average growth rate of 2.3% between 2016 and 2024.

Key developments in Israel's infrastructure sector:

  • Our Country Risk team expects growth in gross fixed capital formation (GFCF) to accelerate by 3.1% in 2015 as result of low base effects following a sharp decline in 2014, estimated at -1.5%. In terms of GDP real growth, our Country Risk team forecasts a more solid 3.1% in 2015, from 1.6% in 2014.

  • Israel's infrastructure project pipeline is relatively well diversified. We identify strong potential in the transport infrastructure sector, particularly airports and railways.

We are also seeing significant developments in the renewables segment of the energy sector. This became evident as Megalim Solar Power Limited achieved financial closure for the USD1.1bn construction contract of a solar thermal power plant in June 2014. The plant forms part of the 270MW Ashalim project, which consists of two CSP parks and one photovoltaic facility in Ashalim, in the Negev Desert.

  • In addition, the discoveries of significant reserves of natural gas in offshore Israel will enable the country to achieve a high degree of energy independence. We expect a large amount of construction of natural gas-fired power plants in the coming years as production of natural gas is ramped up. Israel's Tamar field has 254 billion cubic metres (bcm) in reserves slated for domestic consumption.

  • We are less optimistic about the residential building sector as it faces numerous obstacles, namely limited and state-controlled land supply, and excessive red tape and bureaucracy. Government efforts to address Israel's housing shortages have been...

Table of Contents

BMI Industry View
5
SWOT Analysis
6
Israel Infrastructure Industry SWOT
6
Market Overview
7
Competitive Landscape
7
Building Materials
8
Middle East
8
Industry Forecast Scenario
14
Table: Israel Construction And Infrastructure Industry Data, 2009 - 2016
14
Table: Israel Construction And Infrastructure Long-Term Forecast, 2014 - 2021
15
Construction And Infrastructure Forecast Scenario
17
Transport Infrastructure
19
Table: Israel Transport Infrastructure Industry Data, 2009 - 2016
19
Table: Israel Transport Infrastructure Industry Long-Term Forecast, 2014 - 2021
21
Transport Infrastructure Outlook and Overview
23
Major Projects Table - Transport
28
Table: Major Projects - Transport
28
Energy And Utilities Infrastructure
30
Table: Israel Energy and Utilities Infrastructure Industry Data, 2009 - 2016
30
Table: Israel Energy and Utilities Infrastructure Long Term Forecast, 2014 - 2021
31
Energy And Utilities Infrastructure Outlook and Overview
33
Major Projects Table - Energy And Utilities
37
Table: Major Projects - Energy and Utilities
37
Residential/Non-Residential Construction And Social Infrastructure Outlook and Overview
40
Table: Israel Residential and Non-residential Building Industry Data, 2009 - 2016
40
Table: Israel Residential and Non-residential Building Industry Data, 2014 - 2021
40
Table: Major Projects - Residential/ Non -Residential Construction and Social Infrastructure
43
Risk Reward Ratings
44
Israel-s Risk/Reward Ratings
44
Rewards
44
Risks
44
Regional Overview
45
Table: Regional Infrastructure Risk/Reward Ratings
49
Company Monitor
50
Africa Israel Group (Danya Cebus)
50
Shikun & Binui (aka Housing & Construction)
51
Global Overview
53
Source: Bloomberg
59
Methodology
60
Industry Forecasts
60
Construction Industry
61
Data Methodology
61
New Infrastructure Data Sub-sectors
61
61
Construction
62
Capital Investment
63
Construction Sector Employment
64
Infrastructure Risk/Reward Rating
64
Table: Infrastructure Business Environment Indicators
65

The Israel Infrastructure Report features Business Monitor International (BMI)'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 Israel Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Israeli infrastructure and construction industry.

Key Benefits

  • Benchmark BMI's independent infrastructure industry forecasts for Israel to test other views - a key input for successful budgetary and planning in the Israeli infrastructure market.
  • Target business opportunities and risks in the Israeli infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Israel.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

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.

Market Overview

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.

Company Profiles*

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.

Sources

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc