The relationship between the performance of the economy and the cost of construction of educational buildings in Egypt: A preliminary study

Abstract

The relationship between macro, international and local economic variables and the construction industry outcomes in Egypt is investigated. In 1992, Egypt launched a national project for the construction of educational buildings. This involved the construction of 1500 standardised design schools every year. From 1999, Egypt started to experience unfavourable economic conditions, ultimately leading to two currency devaluations during the period 2001-2003. The value of the fixed exchange rate currency settled at nearly 50% of its previous value. This research draws on a unique panel dataset in which each observation describes the cost and specification of an educational construction project. This allows design factors to be effectively standardised. The dataset is rich in variation in terms of economic variables. This permits the analysis to examine the impact of both economic variables and local factors on project cost. The paper concludes by mapping out future and ongoing work aimed at establishing and developing an analytical tool likely to have considerable value to planning authorities and construction industry stakeholders.