Construction in Morocco - Key Trends and Opportunities to 2023

Construction in Morocco-Key Trends and Opportunities to 2023

Summary

Morocco's construction industry registered minimal growth in 2018, with output growing at 0.6% in real terms; this was preceded by annual growth rates of 1.6% in 2016 and 0.7% in 2017. This slow growth can be attributed to the government's efforts to reduce the fiscal deficit, reduced investments in commercial and industrial construction projects due to delayed payments and delays in the signing contracts between investors and the government. Overall, the industry posted minimal growth during the review period (2014-2018), registering a compound annual growth rate (CAGR) of 0.91% in real terms.

The industry is expected to recover in 2019, with the industry's output expected to expand by 2.5% in real terms that year. In a bid to reduce social disparities in rural areas, the government increased its expenditure in the 2019 budget by 8.8%, going from MAD6.8 billion (USD 744.9 million) in 2018 to MAD7.4 billion (USD 803.8 million) in 2019, in order to improve accessibility, electrification, the drinking water system and the supply of education and healthcare facilities. In April 2019, a memorandum of understanding was signed between the Moroccan government, China Communications Construction Company Limited International (CCCC) and China Road and Bridge Corporation (CRBC) to develop the industrial city 'Mohammed VI Tangier Tech' near the northern city of Tangier. The government aims to attract MAD92.4 billion (USD 10 billion) in investment to new high-tech city over the next ten years. The focus on the development of renewable energy infrastructure is also expected to drive industry growth. The government aims to generate 42% of the country's total energy requirements from renewable sources by 2020.

The industry's output value in real terms is expected to rise at a CAGR of 3.46% over the forecast period (2019-2023).

GlobalData's Construction in Morocco-Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Moroccan construction industry, including:

- The Moroccan construction industry's growth prospects by market, project type and construction activity

- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Moroccan construction industry

- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

- GlobalData expects the infrastructure construction market to record a forecast-period CAGR of 6.40% in nominal terms, driven by public and private sector investments in public transport infrastructure. In the 2019 budget, the government allocated MAD13.9 billion (USD 1.5 billion) for major infrastructure projects. The government plans to invest MAD5.6 billion (USD 610.7 million) to enlarge the existing tramway line in Rabat, the country's capital, by 29km by 2022.

- Energy and utilities construction market's growth over the forecast-period will be supported by the government's plan to increase the share of renewable energy in terms of the total energy mix. The government aims to generate 42% of the country's total energy requirement through renewable sources by 2020 and 52% by 2030. In the first half of 2019, a consortium consisting of EDF Renewables-a French renewable energy group-Abu Dhabi Future Energy Company (Masdar) and Morocco's Green Energy of Africa won a contract worth MAD7.4 billion (USD 797 million) to construct a hybrid solar project near Midelt.

- GlobalData expects the residential construction market to account for 31.3% of the industry's total value in 2023, driven by government efforts to balance housing demand and supply through the construction of housing units, ongoing urbanization, population growth and positive developments in regional economic conditions. According to the Ministry of Housing and Urban Development, the government plans to construct 800,000 social housing units across the country by 2021.

- Institutional construction market's growth over the forecast-period will be driven by investments in educational and healthcare building construction projects. In the 2019 finance bill, the government increased its spending on the education sector by 8.6%, going from MAD62.6 billion (USD 6.8 billion) in the 2018 bill to MAD68 billion (USD 7.4 billion) in the 2019 bill. Moreover, the government increased its 2019 finance bill allocation for the healthcare sector by 10.9%, going from MAD14.7 billion (USD 1.6 billion) in the 2018 bill to MAD16.3 billion (USD 1.8 billion) in the 2019 bill.

- The total construction project pipeline in Morocco-as tracked by GlobalData, and including all mega projects with a value above USD 25 million-stands at MAD602.1 billion (USD 65.7 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 56.3% of the pipeline value being in projects in the pre-execution and execution stages as of August 2019.

Scope

This report provides a comprehensive analysis of the construction industry in Morocco. It provides-

- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Morocco, featuring details of key growth drivers.

- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

- Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.

- Assess market growth potential at a micro-level with over 600 time-series data forecasts.

- Understand the latest industry and market trends.

- Formulate and validate strategy using GlobalData's critical and actionable insight.

- Assess business risks, including cost, regulatory and competitive pressures.

- Evaluate competitive risk and success factors.