Slower growth expected for MENA region construction industry
Published by Lucy Stewardson,
According to GlobalData, construction in the Middle East and North Africa (MENA) region has been relatively sluggish and is forecast to grow at 3.3% in 2019, with the pace of growth then accelerating throughout the forecast period to reach 4.9% by 2022 – 2023.
According to GlobalData’s latest report (‘Global Construction Outlook to 2023 – Q3 2019 Update’), Saudi Arabia remains the largest regional construction market in the Middle East, despite a contraction in construction in the kingdom in recent years. Construction output is forecast to recover in 2019, growing by 2.6%, before posting average growth of 3.8% in 2020 – 2023.
“The construction market started on a positive note in Saudi Arabia in 2019, growing by 1.3% y/y in 1Q19 in real value-add terms, attributed to rising oil prices and a surge in the non-crude sector,” said Yasmine Ghozzi, Economist at GlobalData. “The significance of construction in Saudi Arabia is accentuated by key transport and mobility schemes, such as Riyadh Metro, social infrastructure developments such as the Ministry of Housing’s Sakani programme, and energy megaprojects such as the state-owned Aramco’s Berri and Marjan oilfields.”
The construction boom in Qatar, which began almost a decade ago, has been showing signs of faltering over the past year, ending up in a sharp slowdown in the rest of the economy as large projects such as the metro and stadiums are largely completed. Construction output decreased by 1.2% y/y in 1Q19 – a sharp deceleration after years of rapid expansion.
“The Qatari construction sector will slow relative to previous years, in general, but the turnaround will come from the North Field Expansion project where Qatar Petroleum announced its aim to increase Qatar’s LNG production from the current 77 million tpy to 110 million tpy within five years, and assigned Qatargas as the operator of the project. Meanwhile, work on the Hamad International Airport and New Doha Port will support growth in the airport and port sectors,” said Ghozzi.
One of the region’s brightest spots will be Egypt, where GlobalData predicts that construction will expand by an annual average of 11.3% between 2019 and 2023.
“Egypt’s economy is forecast to expand at a relatively rapid rate over the next two years, driven by sustained growth in natural gas production and a recovery in tourism,” said Ghozzi. “Delivering an ambitious renewable energy programme is a priority for the government. Construction activity is also being driven by Cairo’s urban development programme, which could involve building 23 new cities.”
Read the article online at: https://www.worldcement.com/africa-middle-east/03102019/slower-growth-expected-for-mena-region-construction-industry/
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