GCC’s construction sector rising despite decrease in oil price
The value of planned construction projects or those that are under way in the GCC is estimated to reach $172 billion in 2015, according to a new report released by audit firm Deloitte.
The figure is also the highest on record to date as the Gulf countries continue to spend in infrastructure projects.
“The $172 billion forecast is despite lower oil prices, continuing political unrest and reduced International Monetary Fund (IMF) growth forecasts across the GCC,” said Cynthia Corby, audit partner and leader of the construction industry for the Middle East.
“However the GCC countries have the beneﬁt of reserves, which they have built up as a buffer and which they can continue to use to achieve their outlined strategies.
“Therefore, they are expected to continue to spend on infrastructure and capital projects in order to achieve their strategies for diversiﬁcation of their economies.” she said.
Almost 40% of the GCC projects currently in execution or pre-execution phases are related to residential, leisure and hospitality buildings.
The construction sector plays a major economic role in some Gulf countries such as the UAE. Meanwhile the industry is also expected to become more relevant as the region gears up to host mega events such as Expo 2020 and FIFA 2022.
According to a study by Ventures ME, construction projects with a combined value of $67.6 billion were completed in 2014 in the GCC.