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Price volatility continues for key construction materials in Egypt, despite a relative cooling of prices as of March 2024. This trend is attributed to the liberalisation of the exchange rate and government-implemented reforms, according to a new report by JLL.
Rebar prices remained elevated at 47,500 Egyptian pounds per tonne by March, surging 41 percent year-on-year (YoY). Additionally, copper cables climbed 112 percent YoY, while aluminium reported a 32 percent YoY jump.
According to JLL's 'Egypt Construction Market Intelligence Report Q1 2024,' benchmark construction rates have increased by more than 20 per cent YoY due to global headwinds such as climate change, adverse weather conditions, elevated interest rates, inflationary pressures, geopolitical tensions, and upcoming key political elections this year.'
That said, its outlook indicates a higher likelihood of volatility due to various economic challenges and external risks.
To effectively address and mitigate these risks, the JLL report places special emphasis on establishing well-defined design and budget objectives in the early stages of construction projects.
It also added the need to recognise the critical importance of project and cost management in adhering to budgets and timelines.
In 2022, more than $36 billion worth of construction contracts were awarded. However, the number fell to $15.9 billion last year, the JLL report said , citing data by MEED Projects.
Based on MEED estimates, the MENA project pipeline is estimated to reach $3.9 trillion. Egypt holds a share of $515 billion in this pipeline, with residential projects accounting for $36 billion and mixed-use projects for $115 billion.
In comparison, Saudi Arabia represents the largest share with $1.5 trillion, accounting for 39 percent of the total MENA pipeline value, while the UAE accounts for $590 billion, representing 13 percent of the pipeline value, JLL said.
(Writing by P Deol; Editing by Anoop Menon)
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