AN ASSESSMENT TO THE COVID-19 IMPACT ON THE CURRENT PRODUCTION GLUT IN THE CONSTRUCTION SECTOR: EGYPTIAN CASE

 

AN ASSESSMENT TO THE COVID-19 IMPACT ON THE CURRENT PRODUCTION GLUT IN THE CONSTRUCTION SECTOR: EGYPTIAN CASE

Doaa M. Salman
Mohab Kamal
Omnia El Basyoni

Abstract

The real estate and construction sector is a lucrative activity to attract investment on both the internationally and national level. The secret behind continuous investment refer to the other tradable sector which still not competitive and the return of investment is still provide marginal benefit. A status quo accelerates the currency devaluation – especially in countries that are facing trade deficit – the devaluation of the currency has been a common phenomenon during the past sixty years and the real estate present an attractive pool to keep the value of human wealth. In countries that are characterized by increasing the population growth rate consequently the demand for housing pushes the government towards developing new cities and a new capital to absorb the demand.
In Egypt the governments built new governorates to absorb the notable increase in the number of population from the centre of the delta to new sites. This strategy helps in, creating new jobs, in order to be able to fulfil the increase in population thus decreasing the crowding effect and minimize wasting resources and opening new opportunities. This paper attempts to analyse the demand and supply side key drivers for steel and cement industry. It investigates how these industries will sustain despite the oversupply status. The current situation presents a future challenge and the paper argue is this sector is going to face market failure. Furthermore, the paper highlight the possible opportunities under the current challenges and assessing the role of the government’s regulations and policies after the recent economic reform and provide possible solutions to keep these industries sustainable.

Keywords: Economic growth, employment, production, consumption, oligopoly, sustainable

JEL Codes: F34, G33, Z32

DOI: 10.37708/el.swu.v3i1.4

CITE AS:

Salman, D., Kamal, M., & Basyoni, O. (2021). An assessment to the Covid-19 impact on the current production glut in the construction sector: Egyptian. Economics & Law, 3(1), 53-63. doi: 10.37708/el.swu.v3i1.4
Salman, Doaa, Mohab Kamal, and Omnia Basyoni. 2021. "An Assessment To The Covid-19 Impact On The Current Production Glut In The Construction Sector: Egyptian". Economics & Law 3 (1): 53-63. doi:10.37708/el.swu.v3i1.4.
Salman, D., Kamal, M. and Basyoni, O., 2021. An assessment to the Covid-19 impact on the current production glut in the construction sector: Egyptian. Economics & Law, 3(1), pp.53-63.
Salman, Doaa et al. "An Assessment To The Covid-19 Impact On The Current Production Glut In The Construction Sector: Egyptian". Economics & Law, vol 3, no. 1, 2021, pp. 53-63., doi:10.37708/el.swu.v3i1.4.

AN ASSESSMENT TO THE COVID-19 IMPACT ON THE CURRENT PRODUCTION GLUT IN THE CONSTRUCTION SECTOR: EGYPTIAN CASE

Download Now!
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

References

  1. Cement division. (2021). Cement industry Figure and facts. Retrieved from
    https://cementdivision.com/cement-industry-in-egypt/facts-and-figures/ .
  2. Central Bank of Egypt. (2020). The central bank of Egypt – initiatives. Retrieved from
    https://www.cbe.org.eg/ar/Pages/CBEInitiatives.aspx.
  3. Corporate Finance Institute. (2015). Market Failure – Definition, Causes, and How to Address. Retrieved from: https://corporatefinanceinstitute.com/resources/knowledge/economics/market-failure/.
  4. Daoud, A. O., Othman, A. A. E., Ebohon, O. J., & Bayyati, A. (2020). Overcoming the limitations of the green pyramid rating system in the Egyptian construction industry: a critical analysis. Architectural Engineering and Design Management, 1-14. https://doi.org/10.1080/17452007.2020.1802218.
  5. Dollery, B. E., & Wallis, J. L. (1997). Market failure, government failure, leadership and public policy. Journal of Interdisciplinary Economics, 8(2), 113-126.
    https://doi.org/10.1177/02601079X9700800202.
  6. The World Bank. (2020). World Development Indicators. Retrieved from https://datatopics.worldbank.org/world-development-indicators/ .
  7. Trading Economics. (2020). Egypt Steel Production | 1991-2020 Data | 2021-2022 Forecast | Historical | Chart. Retrieved 19 August 2020, from https://tradingeconomics.com/egypt/steel-production.
  8. Ezzsteel. (2018). Ezz financial statements. Retrieved from: https://www.ezzsteel.com/investor-relations/ezz-steel-co-s-a-e/financial-reports.
  9. Liedholm, C., & Mead, D. C. (1987). Small Scale Industries in Developing Countries: Empirical Evidence and Policy Implications. Michigan State University, Department of Agricultural, Food, and Resource Economics. DOI 10.22004/ag.econ.54062
  10. Musarat, M. A., Alaloul, W. S., & Liew, M. S. (2021). Impact of inflation rate on construction projects budget: A review. Ain Shams Engineering Journal, 12(1), 407-414. https://doi.org/10.1016/j.asej.2020.04.009.
  11. Salman, D. M. (2017). An assessment of the oligopoly cement industry in Egypt: is it a curse or a blessing? International Journal of Green Economics, 11(1), 41-61.
    https://doi.org/10.1504/IJGE.2017.082713.
  12. Salman, D., & Mohamed, S. (2019). Price discrimination in the Steel Industry: evidence from Egypt. Proceedings of Business and Economic Studies, 2(3).
    https://doi.org/10.26689/pbes.v2i3.699.
  13. Shiha, A., Dorra, E. M., & Nassar, K. (2020). Neural networks model for prediction of construction material prices in Egypt using macroeconomic indicators. Journal of Construction Engineering and Management, 146(3), 04020010. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001785.
  14. Windapo, A., & Cattell, K. (2012). Examining the trends in building material prices: built environment stakeholders’ perspectives. Manage Construct Res Pract, 1, 187-201. Retrieved from https://core.ac.uk/download/pdf/196579323.pdf#page=201.
  15. World Steel Association. (2020). World Steel in Figures. Retrieved 3 June 2020, from https://www.worldsteel.org/en/dam/jcr:f7982217-cfde-4fdc-8ba0-795ed807f513/World%2520Steel%2520in%2520Figures%25202020i.pdf.