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

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.