Oman’s economy is growing at a healthy pace, not least because of strong government spending, which is helping to fuel activity in the construction sector in particular.

This bodes well for local contractors and construction industry suppliers such as Al-Hassan Group. However, there is only so much growth possible in a country the size of Oman, which has a population of less than 3 million and had a total gross domestic product of $72bn in 2011.

It is difficult to get a clear view of how well Al-Hassan Group is performing as no accounts are publicly available. The only part of the business that does release financial data is its listed subsidiary, Al-Hassan Engineering Company.

In 2011, the division posted a 1 per cent rise in revenues, but an 8 per cent fall in net profit compared with the previous year. Revenues continued to fall in 2012, dropping 18 per cent from 2011 to RO50.2m. The company made a net loss of RO3.6m for the year.

The figures reflect increased competition in Oman. According to other contractors in the market, price is often the most important factor in contract awards, trumping other issues such as quality. The falling revenues and the losses also suggest Al-Hassan Group might be suffering from similar problems that other contractors have seen, including delays to state contracts.

The group’s presence in the UAE should pay off in the coming years if the improvement in Dubai’s economy continues and Abu Dhabi recovers as expected. But further diversification and the development of more export markets would help it to resist troughs and competition in the local market more easily.