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The civil construction market has been the largest sector in the GCC projects, driven mainly by booming economies and populations in the UAE, Saudi Arabia and Qatar
By Pratap John/Chief Business Reporter
Qatar’s civil construction market is now valued at $32bn, which is the region’s third largest, a new report has shown.
Saudi Arabia is the region’s largest civil construction market (by value of work) under way, with $81bn in contracts under construction. The UAE market is worth $66bn, shows Meed Insight’s GCC Construction Report 2014.
The GCC (Gulf Co-operation Council) civil construction market has returned to growth with a total $59bn in contracts awarded last year, a level not seen since 2008, the report said.
Historically, Meed Insight said the civil construction market has been the largest sector in the GCC projects, driven mainly by booming economies and populations in the UAE, Saudi Arabia and Qatar.
“These markets are investing billions of dollars to create new or upgrade existing infrastructure,” said Ed James, head, Meed Insight.
Other key factors that have driven this growth include high oil prices and strong population growth.
“None of these drivers is expected to change dramatically in the medium term,” he said.
Excluding schemes on hold or cancelled, the report estimates the current value of live civil construction projects to be just over $1.3tn, with $935bn in execution including long-term megaprojects, $81bn out to tender, $211bn in design phases and $136bn under study.
“While new contract awards are a big boost to the economy, completed projects are the ones that ultimately will have the most significant impact on regional economies,” according to Becky Crayman, head (Awards) at Meed.
Meed Insight said Kuwait, Oman and Bahrain remained “small civil construction markets” in comparison to their GCC neighbours. Both Kuwait and Oman have the potential, however, to increase the value of construction deals by harnessing their private sectors. There are indicators that both could become major markets if they adopt the right policies and strategies.
Looking ahead to the rest of 2014, Meed Insight forecasts an increase in the region’s overall projects market, with significant country variation.
“The margin between Saudi Arabia and the UAE is expected to narrow as contract awards in the kingdom slow while those in the federation quicken on the back of a revitalised Dubai real estate sector and the emirate’s preparations for the World Expo 2020. The overall forecast for the year is for $68bn worth of civil construction contract awards,” James added.
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