CAIRO: The annual Inter Build construction trade show has been coming to Egypt for a decade and a half now, but its last few visits have been the rosiest.
As Egypt has drawn more and more foreign investment over the past five years, the construction and housing sectors have been among the main beneficiaries, maintaining breath-snatching growth rates even as similar markets crumple abroad.
As the 15th Inter Build Egypt show opened at the Cairo International Conference Center Thursday, over 900 exhibitors filled the barn-sized Nasr City showrooms to hawk products and services of nearly every construction-related stripe, from air conditioners to marble countertops.
Promoters expect the show to draw 60,000 visitors before it ends next Monday.
The Egyptian construction sector grew at 15.8 percent in the fiscal year between 2006 and 2007 – a 3.8 gain over the previous year – according to state statistics. During the same period, construction made up about 6.2 percent of the country’s gross domestic product.
Ballooning disposable income alongside the expansion of residential areas like those in the Sixth of October and New Cairo satellite cities will push spending on residential construction here to $606 million by 2015, according to a study published last year by Global Insight, a financial researcher.
The study predicted that total construction would reach $6.4 billion over the next seven years.
Not that there aren’t some hurdles: The Global Insight study classified Egypt as a “high-risk country, citing rampant corruption, sluggish bureaucracy, rising unemployment, low overall income and security threats.
“Poor infrastructure, low productivity, scarcity of skilled labor, growing unemployment, and other factors are adversely affecting the economic activity in the country, which in turn increases the economic risk of the country in the long term, the report read.
Inflation and climbing energy costs are also concerns. Construction here has become 27 percent pricier since January, investment bank HC Securities reported earlier this year. But so far the outlook of construction sector officials has remained almost universally cheerful. One often-heard refrain is that the market here has been underdeveloped for so long that it will take years just to meet pent-up demand. Talk of bursting bubbles is generally brushed off.
There is even a silver lining to higher energy prices, one Inter Build exhibitor suggested: Although oil prices make construction costlier, they also enrich the Gulf states that provide much of Egypt’s foreign investment.
