Construction sector shrinks as material prices soar

The number of registered contracting and building companies has fallen from 41.000 to 14,000, according to Mohamed Abul Enein, secretary general of the Egyptian Federation for Construction and Building Contractors.

Some of the companies simply ended their work, while others reported bankruptcy as a result of the increasing prices of construction materials and the deteriorating security situation in the country.

Hesham Youssry, deputy secretary general of the federation, said that price hikes that had halted projects will also affect other government projects, particularly its plans to build 1 million new housing units.

Meanwhile, the federation submitted a memo to the Cabinet asking for a six-month grace period for its projects due to ongoing political instability, which has made transporting raw materials to work sites impossible as a result of the fuel shortage, amid increasing fines on companies that don’t complete their work on time.

The federation is calling on the president, the prime minister and the housing minister to stop the price increases in construction materials asking for a grace period.

The construction and building sector is one of Egypt’s main industries, and its contraction would have a heavy impact on unemployment rates and further affect more than 90 other industries, including cement, steel, paint, ceramic and wood.

Edited translation from Al-Masry Al-Youm

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