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The Middle East construction market is growing rapidly to reach US$ 434 billion by 2013. According to ConsTrack360, steady economic development has led to increased construction activity across building and infrastructure sectors.
The anticipated growth in the Middle East construction market comes with GCC (Gulf Cooperation Council) countries offering long terms plans that focus on social infrastructure, tourism and transportation. Key indicators include moderately stabilized oil prices, increasing tourism as well as mega events such as Dubai 2020 Expo, FIFA World Cup 2022 along with a range of large-scale projects in Qatar, and International airport expansion in Kuwait amongst others.
Largest Middle East nation geographically, Saudi Arabia has planned large scale capital projects that will boost growth of construction industry. There are over 900 projects scheduled to begin work and that which are due by or before 2023. ‘Saudi Vision 2030’ lead by Public Investment Fund (PIF) is expected to have a major impact on the construction projects that include both residential and non-residential segments which includes commercial, institutional, industrial, and infrastructure segments. The Saudi Arabian construction industry in value terms increased at a CAGR of 4.4% during 2014-2018. Over the forecast period of 2019 to 2023, the industry is expected to record a CAGR of 5.8%.
The growth also comes with the Kingdom’s plan to increase contribution of private sector in industries such as healthcare, manufacturing, mining and transportation amongst others. The move, which includes new investment opportunities, would be done through joint ventures or public-private sector partnerships.
The construction market in the United Arab Emirates (UAE) has remained stable with commercial buildings driving the segment, while economic diversification gathering pace and pushing all the seven emirates to develop higher-value services. The UAE commercial building construction market in value terms increased at a CAGR of 9.5% during 2014-2018. Over the forecast period of 2019 to 2023, the market is expected to record a CAGR of 7.7%.
Deemed as a substantial on short term, Dubai 2020 Expo aims at driving commercial activity while boosting tourism. On long term, the country aims at stimulating investment in commercial buildings in Abu Dhabi, diversifying from oil-based revenues.
Abu Dhabi government aims to attract over eight million tourists annually by 2030 under its ‘Abu Dhabi 2030 Plan’, nearly doubling it from current status. It also plans to expand in retail space to 4 million square meters and office space to 7.5 million square meters by 2030.
Qatar is likely to emerge as one of the fastest growing construction markets globally. The construction industry in value terms increased at a CAGR of 6.9% during 2014-2018. Over the forecast period of 2019 to 2023, the industry is expected to record a CAGR of 12.1%, increasing from QAR 123,998.2 million in 2019 to reach QAR 195,559.3 million by 2023.
It has high investment confidence and public spending capacity, with numerous large-scale infrastructure projects underway, owing to preparation of FIFA 2022 World Cup.
The Qatar government also is working to be committed to the development of non-residential projects along with expansion of rail and road networks. It also plans to improve its health and education sectors along with tourism.
Kuwait is moving towards its strong initiative to focus on infrastructure and invest in activities related to the construction sector. Its main focus is on PPP (Public-Private-Partnership) projects as it aims to minimise risk and boost commercial returns. New residential cities are being developed along with US$ 18 billion worth railway system and US$ 12 billion airport, signalling investors that it is open to develop at a fast pace.
Egypt’s construction industry is known to be stable and steady with focus on utilities growth along with residential sector. Egyptian government aims to attract foreign investment that supports development of major projects. The country has a strong infrastructure project pipeline.
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