BMI View: Construction industry growth in Angola will remain tepid until 2020 as budgetary pressures in the wake of the oil price collapse weigh on the government's ability to finance infrastructure development. Growing Chinese involvement in the market will ensure industry growth remains in positive territory.
Forecast And Industry Developments
The Angolan construction industry will expand by a tepid 3.5% in real terms between 2017 and 2019 as the weak commodities outlook continues to limit revenues and the government's ability to finance infrastructure development. Continued support from China in the form of cheap credit lines and the increasing involvement of Chinese firms in oil infrastructure and the transport and power sectors will be crucial in keeping industry growth in positive territory.
We expect growth to pick up from 2020, in line with the expected recovery in Brent Crude oil prices. This will not only drive further investment in oil industry and associated infrastructure, but also help to relieve budgetary pressures, which will allow for increased spending to be directed towards infrastructure development. Real growth is projected at 6.8% in 2020.
The market is forecast to record annual average growth of 5.8% in real terms between 2017 and 2026.