2013-12-29 17:25:49 - New Construction research report from Business Monitor International is now available from Fast Market Research
A strong government focus on infrastructure investment is underpinning our positive near and medium term outlook for the construction industry. The FY2013 and proposed FY2014 budgets outline a strong focus on infrastructure investment, in line with the 2013-2017 National Development Plan. Supported by government investment plans, over the medium term we expect construction industry value real growth to average 12.9% per year between 2013 and 2017.
Angola's construction industry is expected to be boosted by a combination of government investment, supported by a drive to develop infrastructure to support economic diversification and a strong expansion in oil production and therefore revenues. The country should also see continued investment from China, Brazil and Portugal, with the former two providing funding to support
investments. With oil exports to the US falling, China will become an increasingly crucial partner for Angola in order to maintain strong oil revenues as production continues to grow domestically.
Full Report Details at
- www.fastmr.com/prod/754455_angola_infrastructure_report_q1_2014. ..
Key elements driving our positive forecast:
* The FY2014, for which the draft proposal was released in October 2013, outlines total spending and revenues of US$72.5bn, with a continued focus on infrastructure and social projects.
* The FY2013 budget, passed in January 2013, outlines a 60% increase in public investment, much of which will be directed to construction projects and infrastructure rehabilitation. Overall, public sector spending will expand by 26% to reach US$52.1bn, a third of which will go to social projects such as healthcare, education and housing, thereby providing a further boost to the construction sector. Elevated oil prices, combined with growth in oil output, should boost revenues in 2013 to support this investment.
* The 2013-2017 National Development Plan will target social infrastructure and basic utilities. Investment in water and electricity provision will be prioritised, as will that into expanding healthcare, education and access to housing. It is hoped that these measures will help the country reach average annual GDP growth of 7.1% over the period, with 7.3% per annum expected in the non-oil sector.
* Over the medium term, funding for infrastructure projects should continue to be available. Oil production is expected to grow by an average of 7% between 2014 and 2018, which will support revenues for infrastructure investment. In addition, in early 2014 we expect Angola's recently delayed Eurobond to be issued. The government is hoping to raise US$500mn in capital, some of which is earmarked for infrastructure investment.
* A major electricity expansion programme is underway, intending to increase the country's power production capacity from the current 1,800 megawatts (MW) to 9,000MW by 2025. Projects under this programme have been moving forward. The US$3bn Lauca hydropower plant is hoped to come online from 2017 (for the initial 400MW), following the awarding of the engineering consultancy contract in July 2013. The Cambambe II expansion project, which will add 700MW, is also progressing, following a World Bank loan for the US$1.5bn project. In total, 15 projects are planned under the expansion programme.
* China will continue to be a key investor in Angola, with trade between the two countries having expanded by 37.7% over 2012, accounting for 40% of all Angolan oil exports. The Angolan National Private Investment Agency released data on the relationship between the two countries on the 30th anniversary of diplomatic ties. The relationship peaked in 2009, when ANIP approved 66 projects from Chinese investors, including 56 for construction, worth over AOP16bn. Between 2002 and 2010, China ExIm Bank provided US$14.5bn in credit for Angola, the majority of which went towards infrastructure projects. We do not anticipate a change in this relationship over the near term.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.