MEED Insight head Ed James told the annual Arabian World Construction Summit in Dubai this morning that the value of new contract awards in the GCC could rise by 20 per cent to $178bn, a new record for the region’s construction sector.
This compared with $147bn worth of contracts awarded in 2013, James said. In 2012, the value of contracts awarded in 2012 was under $120bn
“The near and long-term trend for the Middle East projects market is now highly positive following a great 2013 and an even better start to 2014,” James said
He said oil prices are set to remain high, while other project market drivers such as population and economic growth remain strong;
“Kuwait, Oman and Qatar could become significant growth markets.” James said.
James said that political, security and bureaucratic issues remain, but need in many sectors outweighs the obstacles.
“However, there is also likely to be more competition as more and more contractors enter the market, especially from Asia,” James said.“Local contractors are also likely to ask for a guaranteed share of work as governments ramp up spending”
“Over the next five-seven years, the GCC projects market could return to the 2006-08 heyday, although this time with work spread more evenly across countries and sectors,” James said.“This in turn will increase the spectre of cost escalation which may become a major problem.”
The three-day AWCS 2014 is being held at the Sofitel Hotel on Palm Jumeirah.
Sponsors and supporters of the MEED AWCS 2014:
- HSBC and CPC are strategic event partners.
- Hyder and Six Construct are gold partners.
- Agis, Mashreq and Projacs are silver sponsors and Deloitte is Knowledge Partner.
- EC Harris Built Asset Consultancy is Lunch Sponsor on day one and Bentley is CEO Forum sponsor.
- Aksa, Drake & Scull, Hill International and Zurich are conference sponsors.
To see more about AWCS 2014, go to www.meed.com.