Ethiopia Construction industry Report 2025: Output to Grow at an AAGR of 7.8% During 2026-2029 After Growth of 9% Growth in 2025

Key market opportunities in Ethiopia's construction industry include expanded budgetary allocations and investments in transport infrastructure, renewable energy, and housing projects, alongside increased foreign investment in banking. Growth is supported by the government's strategic development plans and major infrastructure initiatives.

Dublin, Feb. 23, 2026 (GLOBE NEWSWIRE) -- The "Ethiopia Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2029 (H2 2025)" report has been added to ResearchAndMarkets.com's offering.

Construction industry in Ethiopia to expand in real terms by 9% in 2025, driven by an increase in the budgetary allocations, coupled with investment in transport infrastructure and renewable energy projects.

Earlier, in July 2025, Ethiopia's House of People's Representatives approved the budget for the 2018 Ethiopian Fiscal Year (from July 8, 2025, to July 7th, 2026). As part of the latest budget, the total government expenditure is estimated to increase by 98.5%, from ETB971.2 billion ($7.3 billion) in the FY2024-25 Budget to ETB1.93 trillion ($14.6 billion) in FY2025-26. The budget prioritizes support for low-income groups through targeted investments in infrastructure, education, agriculture, health, and regional development.

Furthermore, in June 2025, the National Bank of Ethiopia (NBE) opened its banking sector to foreign investors, marking a significant overhaul of its financial system. This will fasten the process of approval of banking licenses in Ethiopia for the foreign institutions and investors. This might spark investors' confidence to undertake new development projects in the country. However, in the short-term, the construction industry is expected to face downside risks, amid low energy exports, weak currency and escalating rift with Eritrea as Ethiopia is seeking direct access to the Red Sea.

Ethiopia's construction industry is expected to grow at an average annual rate of 7.8% from 2026 to 2029, driven by investments in transport infrastructure, industrial, nuclear and renewable energy projects. In September 2025, Prime Minister Abiy Ahmed announced a ETB4 trillion ($30 billion) infrastructure initiative that encompasses construction of oil refinery, a gas facility, a new airport and housing facilities.

As part of this initiative, in the same month, the Prime Minister announced a plan to construct two nuclear power units each having a capacity of 1.2GW. The units are slated to become operational between 2032 and 2034. The initiative also includes a target of constructing 1.5 million housing units by 2031.

Growth over the forecast period will also be supported by the implementation of the government's ten-year strategic development plan (2021-30) that aims to increase electricity service coverage from 44% in 2019 to 100% by 2030 and expand power generation capacity from 4.2GW to 17.2GW. Forecast period growth in the Ethiopian road construction industry will also be supported by the government's plan to expand the national road network to 245,000km by 2032, compared to 142,500 as of August 2024.

Report Scope

• Historical (2020-2024) and forecast (2025-2029) valuations of the construction industry in Ethiopia, 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 our 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 business strategies using the analyst's critical and actionable insight
• Assess business risks, including cost, regulatory and competitive pressures
• Evaluate competitive risk and success factors

Key Topics Covered:

1 Executive Summary

2 Construction Industry: At-a-Glance

3 Context
3.1 Economic Performance
3.2 Political Environment and Policy
3.3 Demographics
3.4 Risk Profile

4 Construction Outlook
4.1 All Construction

• Outlook
• Latest news and developments
• Construction Projects Momentum Index

4.2 Commercial Construction

• Outlook
• Project analytics
• Latest news and developments

4.3 Industrial Construction

• Outlook
• Project analytics
• Latest news and developments

4.4 Infrastructure Construction

• Outlook
• Project analytics
• Latest news and developments

4.5 Energy and Utilities Construction

• Outlook
• Project analytics
• Latest news and developments

4.6 Institutional Construction

• Outlook
• Project analytics
• Latest news and developments

4.7 Residential Construction

• Outlook
• Project analytics
• Latest news and developments

5 Key Industry Participants
5.1 Contractors
5.2 Consultants

6 Construction Market Data

7 Appendix

For more information about this report visit https://www.researchandmarkets.com/r/v4wj2s

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