The sector continues to face several challenges of an exogenous nature and beyond the control of operators in the sector. The latter, gathered under the leadership of the National Federation of Building and Public Works (FNBPT) call for urgent measures to save the productive fabric of the construction industry which represents a key sector of Moroccan economic growth and which irrigates several productive sectors.
The construction and public works sector is sailing on sight. Like many economic activities, this key sector, given its contribution to employment and growth, is not immune to the generally unfavorable economic, national and international context. In 2022, it continued to face several challenges of an exogenous nature and beyond the control of operators in the sector.
According to the profession gathered under the leadership of the National Federation of Building and Public Works (FNBTP), operators continue to suffer a worrying crisis due to the exceptional fallout linked to the pandemic crisis and more recently to the war in Ukraine.
Consequently, as explained by the officials of the FNBTP, the national construction company, all sizes and branches combined, is today suffering the unsustainable and irreversible repercussions of the unprecedented surge and instability in the prices of raw materials, of certain essential materials and equipment used in construction projects.
Inflationary pressures
However, the construction & public works sub-sector sees some signs of a timid recovery. Public investments (+6.5% of the budget compared to 2021) in health, road networks, the port, major hydraulic installations and other public infrastructures, have been able to maintain the momentum among operators in the construction sector, which have maintained an air of optimism to move towards recovery, particularly in the infrastructure segment. However, the residential segment has seen its growth observed in 2021 stagnate due to the gloomy and uncertain economic outlook and the mismatch between real estate supply and demand.
That said, like the real estate sector, the construction industry has been hit hard by the general increase in inputs since the start of the year. Indeed, major building materials, including steel, cement, aluminum and ceramics, are under inflationary pressures, which is largely attributed to the growing scarcity of raw materials and global material prices, in addition logistical challenges and rising fuel prices. Thus, since January 2020, steel prices have increased by 72% to $489.2 per metric ton, aluminum has increased by 55.5% to $2864.8 per metric ton, followed by a rise 92.4% in fuel prices (mainly diesel) to around $1,906.3 per ton.
Circular 09/2022 did not have the desired effect
To deal with the unprecedented situation, a circular was adopted on April 18, 2022 (n° 09/2022). It provides for a series of exceptional measures in favor of companies holding public contracts with a view to mitigating the impact of the rise in prices.
According to the FNBTP, the implementation of this circular, which ended on October 18, 2022, encountered countless difficulties in its application. The leaders of the Federation deplore, in substance, the passive behavior of several project owners who ignored the recommended directives; non-uniform application of its provisions by the various administrations and their subdivisions at the territorial level and the extremely limited period of application of the circular. Also, they criticize the non-restoration of the financial balance of the markets and “an extremely restrictive reading made by the administration of the provisions of the circular”.