Construction in Egypt
In a country long known for its ancient civilisation, with 80 million people in an area of 1,001,450 km2 (386,659 miles2) and coastline of 2,450 km, and where the economy is one of the largest and most diverse in the Middle East, one would expect Egypt to enjoy a booming construction sector. However, and according to a report by Daily News Egypt, this is not the case.
Total spending on construction projects in Egypt marked a 5.14% drop in the 2013/ 2014 fiscal year (FY), according to a recent statement by the Central Agency for Public Mobilisation and Statistics (CAPMAS).
CAPMAS noted that the figure fell from EGP 14.78bn in FY 2011/ 2012 to EGP 14.02bn for FY 2012 /2013. The agency cited an unstable economic scene and subsequent decline in construction projects as reason for the decline.
Total spending on construction of residential buildings reached EGP 847m for FY 2012/ 2013 compared to EGP 970m the year before, registering a decrease of 12.60%.
Spending on the construction of healthcare buildings reached EGP 222m in the year 2012/ 2013, compared to EGP 289m in 2011/ 2012, registering a 23.17% decline.
A decrease of 1.46% was recorded in the construction of water stations and networks by public sector companies/public businesses.
Expenditure reached EGP 3.20bn in 2012 /2013 in comparison with EGP 3.25bn in 2011/ 2012. Electricity stations, networks and transformer construction projects reached EGP 441m in 2012 /2013, compared to EGP 458m in 2011/ 2012, marking a decrease of 3.71%.
Hassan Abdelaziz, CEO of the Egyptian Federation for Construction and Building Contractors (EFCBC), said that the announced figures are “too optimistic” and that the current situation may be much worse.
He added that construction companies are operating in Egypt at only 60% capacity.
Abdelaziz noted that this would affect unemployment, with a rising number of job losses which would hit the public sector harder than the private sector. He mentioned that the project to build one million residential units announced last March, to be implemented by the armed forces and Emirati construction company, Arabtec, and other low-income residential units might mitigate the effect of the problem.
Abdelaziz also said that the decline had no connection with the recent Presidential elections, but depends mainly on the state’s resources and whether the government has enough funds for projects or not.
Source: Daily News Egypt