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 USD 988 per ton by March, surging 41 pct YoY. Additionally, copper cables climbed 112 pct YoY, while aluminium reported a 32 pct YoY jump.
According to JLL’s ‘Egypt Construction Market Intelligence Report Q1 2024,’ benchmark construction rates have increased by more than 20 pct 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 USD 36 bln worth of construction contracts were awarded. However, the number fell to USD 15.9 bln last year, the JLL report said , citing data by MEED Projects.
Based on MEED estimates, the MENA project pipeline is estimated to reach USD 3.9 trillion. Egypt holds a share of USD 515 bln in this pipeline, with residential projects accounting for USD 36 bln and mixed-use projects for USD 115 bln.
In comparison, Saudi Arabia represents the largest share with USD 1.5 trillion, accounting for 39 pct of the total MENA pipeline value, while the UAE accounts for USD 590 bln, representing 13 pct of the pipeline value, JLL said.
