Egyptian Construction Segment To Stay Attractive

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MENA constructionThe Egyptian construction sector is considered to be the one of the finest in the Middle East and North Africa (MENA) region, because of its track record and future growth opportunities.

Apart from the GCC, compared to its neighbors, Egypt has also done well economically, apart from a few key hiccups during recent times. One of these includes the global drastic fall of oil prices.

We take a look at the special place Egypt occupies in the region, and broader economic insights into the construction projects in Egypt by BNC Network.

MENA Construction

The construction segment in the MENA region is considered to be multi faceted in terms of factors like profits and indicators, which makes it hard to compile forecasts or make broad conclusions.

Egypt is a special case because it is widely considered to be the best market for construction in the MENA region.

Two important recent problems that affected the country include the devaluation of the currency, and rate of inflation, which is considered high.

Key Catalysts

The government under President Sisi has undertaken many large infrastructure projects in the country, which has played an important role in driving the segment as a whole.

These projects have created better margins and made sure that payments take place on time. These are expected to remain this way throughout the year 2017.

The comparison with Saudi Arabia is the most useful in this sense.

Key catalysts constructionWhile Egypt will be expecting a 95% rise in spending, Saudi Arabia is estimated to see a 15% decline.

Construction Segment In The GCC

The construction sector in the GCC countries is expected to see a decline as well, and this has been linked to the initiatives that took place in 2014.

That year, there was a big rise in revenue, and spending also climbed.

It is the capital spending department that is expected to face the most hardship, but this issue is going to become worse because of the recent cuts in spending.

These initiatives include cutting the compensation and benefits for people who work for the government.

How Oil Has Affected Revenue

A massive amount of revenue was lost by GCC countries because of the fall in oil prices.

It has been estimated at about $150 billion, all based on the fact that oil went from $75 a barrel, to $50.

Because of this loss, it is estimated that there will be more cuts in spending until oil prices rise again.