Egypt's construction industry is expected to grow by 6.8 percent year-on-year in 2023, with an average annual growth rate of 7.4 percent predicted between 2024 and 2027, according to a report by Fitch Solutions.

The expected growth would still be lower than the 9.9 percent recorded between 2015 and 2019 before the pandemic.

Egypt’s increased debt depresses public infrastructure spending, while the devaluation and instability of the Egyptian currency hinders foreign investments, the report said.

Positive indicators

Despite these challenges, large-scale infrastructure projects, such as the Ain-Sokhna-Marsa Matrouh High-Speed Rail project, will provide support for growth. In addition, the government's privatisation drive is expected to increase private sector participation in the infrastructure sector and improve transparency and bureaucracy, drawing in foreign and local investment, Fitch noted.

The rating agency maintained that Saudi and UAE-based investors are expected to be key strategic partners for the Egyptian government during the divestment program, creating significant opportunities for contractors and infrastructure companies from those markets.

The Fitch report noted that the construction market in Egypt is currently benefiting from strong economic growth, ongoing political and macroeconomic stability and a young and growing population.

Earlier in April, data by the Central Agency for Public Mobilisation and Statistics showed that 246,000 residential units were built in Egypt during FY2021/2022, a 36.65 percent decline over the previous year.