The construction market in UAE is expected to exhibit the most favourable growth prospects in the near term besides Saudi Arabia and Qatar.
A key driver of growth will be the considerable funding allocated to infrastructure projects, says a report published in a local daily.
The Emirates Business quoting “Deloitte Middle East report” has said that Saudi Arabia plans to spend $400 billion (Dh1.46 trillion) over the next five years. In the UAE, the majority of infrastructure spending will be borne by Abu Dhabi with $275bn of projects in the pipeline in the next five years. Qatar has $10bn of strategic infrastructure projects planned.
In addition, fuelled by strong demand and available funding, the real estate sector is set to grow significantly in Saudi Arabia, Abu Dhabi and Qatar, the report believed and added that GCC has not been immune to the global economic slowdown.
However, while global growth in 2009 is expected to be the lowest since the Second World War at 0.5 per cent, the GCC region is still expected to grow at 3.5 per cent during the same period.
The value of projects planned or under way as of July 20, 2009, for Saudi Arabia and the UAE is $578bn and $916bn respectively, it found.
However, the commercial changes that the financial downturn has brought about and the burden of risk on the contractors, mean it is not going to be easy to manage the risk. But it is possible and the opportunities to make money in the GCC do exist, said the report, ‘GCC Powers of Construction, 2009’.
The report said that “bond issue by the Dubai Government was a very positive step and has created the impetus for other GCC countries to do the same to stabilise their economy through this type of funding. This coupled with wealthy sovereign funds, which are investing in equity, will give the economies in the GCC the support and stability they require to sustain the downturn and focus on growth manage the risk”.
“Currently about 50 per cent of all building developments in the Gulf is taking place within its borders. Abu Dhabi is anticipated to continue its strong construction performance thanks to the emirate’s 2030 Plan which calls for a vast range of projects in energy, transport, industry, health care, education, government, agriculture and much more,” it added.