Based on current data from MEED projects, it appears that construction companies can look forward to a cautious recovery in the market following a challenging period of subdued performance. Long-term positive factors such as demographic demand drivers and government support combined with a modest rise in oil prices remain key drivers for capital spend and will remain the catalyst for spend on capital and infrastructure projects. The industry has been awaiting the award of a range of projects identified by each GCC country as part of their defined long-term vision, with transport, social infrastructure and tourism programmes among the key priorities.
Saudi Arabia currently represents the biggest potential in the Middle East, with capital projects worth more than $1.2 trillion in the pre-execution stage, compared to $713 billion in the U.A.E., $578 billion in Egypt and $215 billion in Kuwait. Saudi’s Public Investment Fund is taking a leading role in delivering Vision 2030 for the Kingdom. Large-scale infrastructure projects outside the oil and gas sector are being planned and will have a substantial impact on the construction awards.
If we look at the value of contracts awarded in 2018 to date, awards in Saudi Arabia are lower than the value of projects awarded to date in the U.A.E., which amount to $20.7 billion. Saudi Arabia is actively seeking to improve its rail, airport, port and other transport-related infrastructure, as well as increase residential supply, healthcare and leisure facilities driven by the development of major mixed-use compounds such as Neom, The Red Sea Project, The Qiddiya Entertainment City and Maritime city among others. Read More...