{"id":659159,"date":"2025-01-22T00:00:00","date_gmt":"2025-01-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypts-construction-sector-is-set-to-grow-7-6-annually-through-2028\/"},"modified":"2025-01-22T00:00:00","modified_gmt":"2025-01-22T00:00:00","slug":"egypts-construction-sector-is-set-to-grow-7-6-annually-through-2028","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypts-construction-sector-is-set-to-grow-7-6-annually-through-2028\/","title":{"rendered":"Egypt\u2019s construction sector is set to grow 7.6% annually through 2028"},"content":{"rendered":"

The construction sector is expected to see significant growth in the years to<\/strong> come: <\/strong>Egypt\u2019s construction sector is expected to grow at an average annual rate of 7.6% between 2025 and 2028, according to a GlobalData report<\/a>. The growth will be supported by major investments in hydrogen infrastructure, renewables, transport, power, and housing projects.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

A more optimistic growth forecast for the longer term:<\/strong> With an estimated market size of USD 55 bn in 2025, the Egyptian construction market is projected to reach USD 82.3 bn by 2030, growing at a compound annual growth rate (CAGR) of 8.39% during the period, according to a Mordor Intelligence report<\/a>. \u201cEgypt has emerged as a significant player in the Middle East and North Africa (MENA) construction sector, positioning itself as the third-largest project market in the region after Saudi Arabia and the United Arab Emirates,\u201d the report said.<\/p>\n

Ras El Hekma is driving the growth:<\/strong> The USD 35 bn Ras El Hekma project<\/a> is one of several key projects driving the sector\u2019s growth forecast \u2014 early last year the Madbouly government gave ADQ the development rights to the 170-mn sqm Ras El Hekma on the North Coast to transform into a next-generation city. The project is expected to house tourism, urban, commercial, and recreational spaces, alongside a freezone and an investment zone. <\/p>\n

Who\u2019s taking on the construction? <\/strong>Last October, ADQ tapped Modon Holding<\/a> to be the master developer on the project. Modon inked agreements tapping the project\u2019s contractor, building material supplier, and others shortly after. <\/p>\n

Renewable energy is another cornerstone of the sector's projected growth:<\/strong> Saudi renewable energy developer ACWA Power is setting up a 10-GW wind farm in Egypt<\/a> \u2014 set to be one of the world\u2019s largest. There\u2019s also Scatec, which plans to<\/a> invest USD 5.7 bn into developing a 5 GW wind farm.<\/p>\n

And we expect more to come: <\/strong>The government is looking to attract USD 34 bn of renewable investments through 2026-2027, a government source previously told EnterpriseAM<\/a>. The government wants to push its green investments to 75% of its total investment spending by 2030<\/a> and have its green economy contribute no less than 5% to its GDP.<\/p>\n

DIVE DEEPER- <\/strong>We break down the renewable projects expected to come online in the near term in a Going Green published last year. Check out the full story here<\/a>. <\/p>\n

There\u2019s also the flurry of green hydrogen and ammonia plants in the pipeline<\/strong>, which are expected to \u201cfurther enhance the Egypt industrial construction market growth.\u201d The government in August launched<\/a> the National Low-Carbon Hydrogen Strategy, which targets 5-8% of the global hydrogen market by 2040.<\/p>\n

Then there\u2019s residential construction<\/strong>, which is expected to continue to grow as the Madbouly government works on \u201caddressing the country\u2019s growing housing deficit.\u201d <\/p>\n

DATA POINT- <\/strong>Residential construction dominated the construction market in 2024, with a 36.9% market share and a market value of USD 18.9 bn. \u201cThis segment's prominence is driven by Egypt's favorable demographics with a young population base and the government's ongoing initiatives to increase homeownership,\u201d the Mordor report said. <\/p>\n

What came in next? <\/strong>Transportation held the second largest share of the country\u2019s construction market in 2024, followed by commercial construction, energy and utilities, and industrial construction, which is \u201cemerging as the fastest-growing sector in Egypt's construction industry segments, with a projected growth rate of approximately 12% during 2024-2029.\u201d<\/p>\n

Also driving the growth: <\/strong>The government is carrying out what Mordor called an \u201caggressive infrastructure development agenda\u201d \u2014 there are some USD 93 mn worth of construction projects under development and another USD 425 mn in the pre-execution stage. <\/p>\n

And there\u2019s more to come:<\/strong> The government is looking at private players to help carry out over<\/a><\/a>USD 3.2 bn worth<\/a> of infrastructure projects through public-private partnerships. The projects include 15 desalination plants with combined investments of USD 3 bn, a USD 95 mn wastewater treatment plant in Sixth of October City next week, a USD 10 mn investor service center, and 22 schools across the country worth USD 60 mn. <\/p>\n

A helping hand: <\/strong>The reinstated 2008 Building Law<\/a> has streamlined permit processes and extended their validity, which will help ease barriers to accessing building permits and support and energize the construction sector in the process. <\/p>\n

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