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Market |
Construction |
Report Type |
Market Research |
Country |
Angola |
Published |
14 September 2009 |
Number of Pages |
53 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
We forecast construction industry real annual growth for 2009 of 2.3%, unchanged from the forecast we made earlier this year. In contrast to the wider economy, construction sector growth should remain positive, and it is believed that there are opportunities in the transport and downstream oil and gas sectors, though the growth rate for 2009 is a marked decline from the double-digit numbers estimated for previous years. It should, however, be noted that forecasting is exceptionally difficult, as official data only cover up to 2003, forcing us to estimate our historical data from 2004 onwards. Real growth in fixed capital formation/capital investment colors our forecasts. Fuelled by rising oil windfalls, capital investment growth reached its peak in 2006. It continued registering double-digit growth in 2007 and 2008. However, the decline in oil prices and the global financial crisis simultaneously reduced oil revenues and investor risk appetite.
Although oil prices bounced in H109 (and were trading at around US$67 per barrel in August 2009, compared with a low of US$35 per barrel in December 2008), they remain well below their July 2008 peak. Also, of course, we expect Angola’s economy to contract in real terms in 2009. Against this backdrop, we continue to forecast a decline in the real rate of growth of total capital investment – from an estimated 20% in 2008 to 2% in 2009. The value of government capital investments, meanwhile, is expected to decline from an estimated AOA401bn (US$5.4bn) in 2008 to AOA322bn (US$3.9bn) in 2009.
India will provide US$40mn in finance for a new railway in Huila province in Angola, according to state news agency Angop (August 2009). The railway will run between Matala and Lubango. The construction will be overseen by Rail India Technical and Economic Services.
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