With approximately $1 billion in planned structure and transportation projects or structure, there is no shortage of potential opportunities in the GCC structure market.
And with another $1.2 billion in promised advances under long-term master transformation plans and megaprojects, such as the long-term city of Neom in Saudi Arabia, the market outlook for the GCC structure is expected to disappear soon.
But while there are many opportunities for structure corporations in the GCC, there are many challenges.
Over the past five years, entrepreneurs, experts and brands have faced great pain and uncertainty due to the fall in oil in 2014.
Reductions in public spending and expansion of oversupply in major genuine real estate markets such as Dubai have reduced opportunities for new projects and a larger festival for work, while overdue bills have affected the flow of money.
With approximately $57.8 billion in structure and transportation allocation contracts awarded at the GCC in 2019, genuine goods and infrastructure in combination accounted for approximately 70.8% of all allocation costs in the region.
Despite this, 2019 is the worst year for the structure industry in the GCC since 2012 in terms of awarding allocation contracts.
Allocations decreased by 9.5% of award titles in 2018, well below $107.5 billion in contract awards in 2013, the year recorded.
However, by the end of 2019, structural corporations had a positive attitude about an expected uptick in structure activity, led by the giant Saudi market. Stabilizing oil costs and releasing megaprojects from the kingdom have promised a new structure for the GCC.
In March, optimism disappointed, as it became transparent that the Covid-19 pandemic was not going to pass quickly, and corporations only aimed at the survival of the crisis.
While Covid-19 blockades disrupted home chains and on-site delivery, an additional drop in oil costs in March and April raised new doubts about long-term allocation opportunities.
The upheavals of the past five years have accelerated in the first five months of 2020, and structural corporations want to reconsider their processes and methods to prepare for the new market of GCC structures in a post-Covid-19 world.
According to MEED Projects’ regional project tracking tool, there is $503 billion in structure and transportation projects in the region. The average expansion of these projects is 67 consistent with one percent, suggesting that most projects have exceeded the point of no return for their investors and will be completed.
The 3 GCC countries below the regional average of 67 with a penny are Oman with 59 cent, Bahrain with 60 cents and United Arab Emirates with 66 cent.
Although structure projects in the region are resilient, they will be a topic for loading pressures. “Two-thirds of the total structure projects still have many complete works and this offers many opportunities for fee reduction,” says a foreign contractor working in the region.
REPORT: GCC Construction Outlook 2020 with coronavirus update
The key to rethinking the business progression strategy is to see where long-term expansion will come from and who will be the top consumers in the long run.
GCC Construction Outlook 2020 is the latest MEED Insight premium intelligence report. It assesses the structure perspective for the next two years after Covid-19, and analyzes demanding opportunities and situations for contractors, experts and suppliers in all six markets in the region.
It is a difficult resource for anyone to do business in the GCC structure and infrastructure sector at a key moment in market development.
MEED’s CCG Construction Outlook 2020 report with the coronavirus update can be found here
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