After a six-year slowdown triggered by the crash in oil prices in 2014 and deepened by the impact of Covid-19, the GCC construction industry is set for a strong recovery in 2021 and 2022.
Boosted by government stimulus spending aimed at accelerating the post-Covid recovery, the region’s contractors, engineers and manufacturers can look forward to a healthy increase in building and infrastructure projects in the coming two years.
The longer-term outlook is boosted by the region’s improving fiscal situation as oil prices recover and output caps are eased.
With a $1.9tn pipeline of future construction and transport infrastructure projects planned across the GCC, there is no shortage of potential project opportunities.
While some of these planned schemes are still many years away from becoming real projects, there is a significant backlog of work that has been delayed by the pandemic, but which can be brought quickly to the market.
According to projects tracking database MEED Projects, about $107bn of planned construction and transport projects in the GCC are already at some stage of tendering. It is fair to assume that the majority of these will be awarded within the coming 18 months.
In addition, about $303bn of construction and transport projects in the GCC are at the design stage.
For many companies, the recovery of the UAE’s projects market will be welcome news
But the post-Covid construction sector will have a different flavour to the market before 2015, which was driven by government spending on infrastructure and an influx of money into GCC real estate.
Saudi Arabia will provide the biggest supply of new construction opportunities in the GCC. With more than $1tn of construction and transport projects planned, and about $58bn of construction contracts being tendered, Saudi Arabia is by far the region’s biggest construction market.
Led by the Public Investment Fund’s programme of Vision 2030 gigaprojects, a wave of projects such as Neom, The Red Sea Project, Qiddiya entertainment city and Diriyah Gate is being delivered by a new generation of clients, whose focus is centred on the development of local capacity, and on using digital technology to reduce waste and improve productivity
GCC Construction Outlook 2021 offers in-depth analysis on the market’s key trends, growth areas and obstacles. The report will inform your strategy, identify new and potential opportunities, highlight challenges in the market and help you minimise risk. Learn more about the report here
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