New figures indicate that Gulf Co-Operation Council (GCC) construction sector activity will reach new heights in 2016. Mid Group founder Sahel Majali discusses how major events set to take place in the region will present developers based in the Middle East with new opportunities over the next few years.
The GCC is a regional intergovernmental political and economic union of all the Arab states in the Persian Gulf, except Iraq. It includes some of the richest states in the Middle East, including Saudi Arabia, Qatar and the United Arab Emirates. The International Monetary Fund recently predicted that the GCC’s economy would expand by 3.25% in 2015, and 2.75% next year.
Economic growth has aided the expansion of the area’s construction industry. This was confirmed by financial services firm Alpen Capital’s GCC Construction Industry 2015 report. The paper explained: “With heavy focus on development of infrastructure, economic cities, airports, public programs etc. the GCC Construction Industry is currently experiencing a booming phase.”
The report went on to say that “local governments are spending heavily on social infrastructure including housing, retail, education and health. This is to cater to the region’s growing populations and also to create a platform to attract private investment in the economies.” It added that GCC construction spending will rise next year. Albawaba reported that the union’s construction sector will reach a record high of $126 billion in 2016, expanding at a compound annual growth rate of 11%.
Paul Wallett the area business director for Tekla Middle East, a firm which supplies model-based software to the construction industry, commented on the report. He noted that “mega-events such as World Expo 2020 and 2022 FIFA World Cup Qatar are driving the Middle East’s demand for increasingly complex architectural and engineering projects, across skyscrapers, stadiums, airports and transit, and museums.”
Mid Contracting MENA
The World Expo 2020, which will take place in Dubai, and the 2022 FIFA World Cup, are expected to draw millions of visitors to the Gulf. Countries throughout the region are set to initiate major infrastructure construction projects to ensure they can host these major events. This should provide Middle East-based developers with a number of construction opportunities to capitalise on, as we head into 2016 and beyond.
Mid Contracting MENA has been delivering major constructing projects of the highest standards of quality and safety in the region for more than 30 years. We’ve worked on a range of prestigious luxury developments such as the International Aqaba Hotel in Jordan, and the Le Royal Beirut Hotel Lebanon. This has supplied us with the skilled professionals, industry expertise and regional connections developers need to enter from region’s burgeoning infrastructure construction sector.