The GCC’s construction market has exhibited growth in 2017, recording a 30% rise in its year-to-date performance.
According to a study by MENA Research Partners (MRP), projects worth $130bn have so far been completed in the region, $30bn more compared to $100 billion for the whole of 2016, despite headwinds that extended from low oil prices to budget adjustments in many GCC countries.
In a statement, MRP noted that the value of the region’s active projects, estimated at $2.6tn, is equivalent to 160% of the regional GDP.
MRP further noted that the UAE and Saudi Arabia account for 70% of the value of active projects.
Both markets are reportedly leading the region’s economic growth, and are being driven by young and fast-growing demographics, in addition to long-term transformational plans with Saudi Vision 2030 and the UAE Vision 2021.
Commenting on the study results, Anthony Hobeika, chief executive officer at MENA Research Partners, said: “This surge is driven by economic diversification […] in leading GCC countries, with a particular focus on sectors like transportation, power and water, manufacturing, and energy […], along with a shift from oil into renewables, where many GCC countries have set ambitious targets to expand their alternative energy generation.
“Governments remain the key drivers of construction activity, as part of their firm commitment to long-term sustainable economic development.”
He continued: “Looking at the recent project announcements, their main focus has been on large-scale strategic developments, like flagship real estate projects, energy, and airports, among others. In return, the role of the private sector has been on a rapid upward trajectory, primarily targeting consumer-driven sectors like retail, logistics, and industrial.
“Governments and the private sector are turning into trusted partners within the construction sector.”
According to Hobeika, tourism and leisure-related projects are being viewed as emerging sectors, as GCC countries look to boost their standing as entertainment and cultural destinations.
He added: “The outlook for the construction market remains compelling, but we [are witnessing] a shift in terms of […] focus areas. While many segments like real estate seem cyclical, other developments linked to the strategic and long-term orientations of governments in terms of economic expansion will definitely present the next wave of opportunities for specialist contractors in the GCC region.”