BMI View: Falling back from unsustainable levels of public investment, the construction sector will moderate from double-digit growth to a slower , but still healthy, pattern over our 10-year forecast period to 2024 . This will be largely driven by continued investment in transport and energy projects. However, an uncertain environment for the crucial mining sector will pose a downside risk and lead to lower capital expenditure.
Cutbacks in Zambia's crucial mining sector have caused us to revise down our forecasts for 2015 and 2016 from 15.16% real growth to 10.1% and from 10.5% to 6.5% respectively.
Overspending and falling copper prices have severely restricted the government's ability to invest infrastructure and we expect capital spending rather than current to be cut more drastically in the run up to the 2016 elections.
On September 7 2015 Glencore announced it would immediately suspend the firm's Mopani copper mining operation. This will hurt the copper sector's output as the mine accounted for 15% of Zambia's total copper production in 2014.
|e/f = estimate/forecast, Source: Central Statistics Office Zambia, BMI|
|Construction industry value, ZMWbn||23.81||28.09||32.05||36.45||41.37||47.08||52.90|
|Construction Industry Value, Real Growth, % y-o-y||11.44||10.05||6.52||6.74||6.50||6.81||5.35|
|Construction Industry Value, % of GDP||14.6||15.9||16.6||17.0||17.3||17.7||17.8|
Zambia has fallen to fifth place in BMI's Sub-Saharan Africa (SSA) RRI, owing to reduced growth prospects.
Overall, the long-term trends suggest the business environment is improving due to former President Michael Sata's anti-corruption drive, although this could be under threat from growing resource nationalism.
Zambia scored 43 overall this quarter, a substantial decrease on the previous quarter.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Zambia 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 Zambia Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Zambian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Zambia to test other views - a key input for successful budgetary and planning in the Zambian infrastructure market.
- Target business opportunities and risks in the Zambian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Zambia.
- 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.