Boston, MA -- (SBWIRE) -- 11/01/2013 -- We are maintaining our outlook for growth in Angola's construction industry as the government focuses on infrastructure investment in an attempt to diversify the economy. In addition to increased spending in the FY2013 budget, which is in line with the 2013-2017 National Development Plan, we also see continued investment from Chinese companies to support national resource extraction. Consequently, we are forecasting construction growth of 15.1% and 14.4% in 2013 and 2014 respectively.

Angola's construction industry is expected to be boosted by a combination of government investment, supported by a drive to develop infrastructure to support economic diversification and a strong expansion in oil production and therefore revenues. The country should also see continued investment from China, Brazil and Portugal, with the former two providing funding to support investments. With oil exports to the US falling, China will become an increasingly crucial partner for Angola in order to maintain strong oil revenues as production continues to grow domestically.

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Key elements driving our positive forecast:

- The FY2013 budget, passed in January 2013, outlines a 60% increase in public investment, much of which will be directed to construction projects and infrastructure rehabilitation. Overall, public sector spending will expand by 26% to reach US$52.1bn, a third of which will go to social projects such as healthcare, education and housing, thereby providing a further boost to the construction sector. Elevated oil prices, combined with growth in oil output, should boost revenues in 2013 to support this investment.
- The electricity expansion programme is underway, with the engineering consultancy contract for the 2GW Luaca hydropower plant project awarded in July 2013. The World Bank has also approved a US $512mn loan for a 700MW expansion of the Cambambe facility.
- Oil production is expected to grow by 16% in 2013, to 2.4mn barrels per day. This should support revenue growth and infrastructure investment.
- The 2013-2017 National Development Plan will target social infrastructure and basic utilities. Investment in water and electricity provision will be prioritised, as will that into expanding healthcare, education and access to housing. It is hoped that these measures will help the country reach average annual GDP growth of 7.1% over the period, with 7.3% per annum expected in the non-oil sector.

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