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Daily News Egypt: Egypt’s construction sector is most prosperous in the MENA region

Egypt is the most prosperous construction market in the region despite the effect of the currency’s devaluation and the high inflation rate.
02.01.17 | Interesting article at Daily News Egypt

The MENA construction sector is surprisingly diverse in terms of exposure, profitability, and metrics, making it difficult to draw broad conclusions, yet currently Egypt is the most prosperous construction market in the Middle East and North Africa (MENA) region despite the effect of the currency’s devaluation and the high inflation rate, according to HSBC’s “MENA construction” report issued on Wednesday.

One of the main drivers for the Egyptian construction sector is the infrastructure projects initiated by President Abdel Fattah Al-Sisi. Such projects have generated good profit margins and timely cash payments, which is expected to continue in 2017 as well since Egypt is expected to see a 95% increase in cash spending while on the other hand Saudi Arabia is expected to witness a drop of 15%.

The report also said that Gulf Cooperation Council (GCC) countries’ construction sector will shrink. The report explains that the expected decrease in the GCC construction sector is due to a period of incredible revenues growth and spending increases in 2014. Adding that the capital spending would bear the brunt of the spending declines, yet the cuts to current spending, including salaries and benefits for government employees has greatly affected the scale of the problem for the GCC.