Algerian Construction Industry – Key Trends and Opportunities to 2022

– The Algerian construction industry’s growth prospects by market, project type and construction activity
– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Algerian construction industry
– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

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Synopsis

In real terms, the Algerian construction industry registered positive growth during the review period (2013-2017). Construction activity, however, experienced a slowdown in 2017, as austerity measures implemented by the government reduced public spending. Furthermore, low oil prices since mid-2014 have affected the flow of investments in construction projects. The governments move towards bringing down the countrys budget deficit resulted in slow growth in the industry. Nevertheless, review-period growth was supported by the ongoing Five-Year Investment Plan 2015-2019, under which the government is investing DZD21.6 trillion (US$215.0 billion) to develop various infrastructure projects by 2019.

The industry is expected to expand over the forecast period (2018-2022), albeit at a relatively slow pace, as volatile oil prices continue to pose a risk to the industrys performance. However, the governments aim to diversify the economy in order to reduce its reliance on the oil sector is expected to support the positive outlook for the construction industry. Additionally, investments under the ongoing five year plan 2015-2019 will continue to support the industrys expansion.

The industry’s output value in real terms increased at a compound annual growth rate (CAGR) of 4.99% during the review period, and is expected to record a CAGR of 4.50% over the forecast period.

Key Highlights

Timetric expects the residential construction market to retain its leading position over the forecast period, with a share of 35.7% of the industrys total value in 2022. Over the forecast period, market expansion is expected to be supported by the governments effort to bridge the gap between housing demand and supply in the country. In July 2017, the government announced plans to construct 26,000 housing units by 2019.

In line with its target to boost domestic automotive production and reduce imports, in November 2017, the Ministry of Industry and Mining signed an agreement with France-based auto manufacturer Peugeot Citroen PSA to construct a new car manufacturing facility with an investment of DZD13.0 billion (US$117.0 million) in the city of Oran. Upon its successful completion in 2019, the new factory is expected to support the manufacturing of 75,000 cars every year.

Timetric expects the energy and utilities construction market output to record a forecast-period CAGR of 8.06% in nominal terms, driven by the governments aim to increase the countrys energy production, in line with the growing demand. In February 2018, Sonatrach, a state-owned energy company, announced plans to invest DZD6.3 trillion (US$56.0 billion) until 2022 to develop the countrys oil and gas sector.

In order to enhance regional connectivity and reduce traffic congestion, the Ministry of Public Works (MTP) is developing a 101km-long new dual line expressway between Saida and Mascara. It involves the construction of tunnels, interchanges, dividers, 25 hydraulic structures and 18 engineering structures. Additionally, the MTP is constructing a 220km-long expressway between Chlef, Tenes and Tissemsilt. These projects involve a total investment of DZD131.3 billion (US$1.2 billion), and are scheduled to be completed during 2020-2021.

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The total construction project pipeline in Algeria, as tracked by the Construction Intelligence Center (CIC) and including all mega projects with a value above US$25 million, stands at DZD20.2 trillion (US$182.3 billion). The pipeline, which includes all projects from pre-planning to execution, is heavily skewed to late-stage projects, with 78.5% of the pipeline value being projects in the pre-execution and execution stages as of May 2018.

Scope

This report provides a comprehensive analysis of the construction industry in Algeria. It provides –
– Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Algeria, featuring details of key growth drivers.
– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
– Listings of major projects, in addition to details of leading contractors and consultants.

Reasons to buy

– Identify and evaluate market opportunities using Timetric’s standardized valuation and forecasting methodologies.
– Assess market growth potential at a micro-level with over 600 time-series data forecasts.
– Understand the latest industry and market trends.
– Formulate and validate strategy using Timetric’s critical and actionable insight.
– Assess business risks, including cost, regulatory and competitive pressures.
– Evaluate competitive risk and success factors.