Egypt sees 2% growth in construction, 6% in steel industry
The construction sector grew 2% while the cost of key materials including cement, ready mixed concrete, and reinforcement steel grew over 6% in the last quarter, according to Gleeds Construction Consultancy.
Construction material prices are expected to increase in the third quarter by 5-10%.
In 2008 and 2009, real term growth in the construction sector was 10%.
Cement prices are expected to increase following Ramadan, as they come under added pressure from changes in taxes, duties, and increased energy costs.
Further economic pressures will trigger a slowdown of activity in the construction sector in the short-term that, in turn, will reduce overall sector capacity as well as increased costs.
Construction represents an increasing share of overall gross domestic product (GDP) and needs to be set against a backdrop of a net decrease in Egypt’s GDP.
Gleeds consideration of key economic indicators suggest slight improvement in key areas such as in stock market indices and a sharp reduction in the rate of annual inflation. There is also a gradual improvement of Egypt’s foreign currency reserves, a recorded second quarter increase of industrial production, and a continuation of the steady reduction of external debt.
The Egyptian pound, however, continues to weaken against the main currencies. Unemployment is high at an official rate of 13% and GDP dropped again for the eighth successive quarter putting Egypt firmly in recession.
Financial aid packages from the Gulf countries as well as proposed national investments may help the Egyptian Pound gain some strength against foreign currencies later in 2015.
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