Cyclical sectors are traditionally more vulnerable to economic slowdown and political upheavals. However, strong demand for real estate fueled by a young and growing population has ensured that demand for building materials — such as steel and cement — remained relatively resilient throughout 2011.

In addition, the near collapse of the nation’s regulatory and municipal entities following the revolution led to a wave of illegal construction. This latest boom further fueled demand for building materials and resulted in a hike in prices during the first quarter of 2011.

At the same time, international financing of major infrastructure projects has left a big portion of the construction sector immune to the country’s current liquidity crisis. Several of the projects implemented in 2011 were actually tendered in 2010 and had their financing secured. This left the contractors’ backlog of projects largely unaffected, but its continuity is yet to be tested throughout 2012.

Head of Research at Prime Holding, Mohamed Seddiek, a Cairo-based financial services company, talks to Business Today about the sector’s dynamics and performance in 2011 and his take  on what to expect in 2012. Bt