Middle East Market Update

Jenny Malem
In this feature we take a look at current market conditions in the Gulf region. Faithful+Gould currently holds data on around US$ 1,383 billion of construction projects underway in the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. This excludes delayed, on-hold and cancelled projects.

 

Despite the downturn the UAE holds the lion's share of ongoing activity with US$ 712bn, followed by Saudi Arabia US$ 350bn and Qatar US$ 152bn.

 

Status of construction projects in the Gulf region

 Source: Zawya project database

 

The real estate sector makes up the largest part of the market with an overall share of 58%. This trend is shared in all regions with the exception of Qatar, where real estate (24%) plays second fiddle to the oil and gas sector (42% of the Qatar market).

 ongoing projects by secto

 

Looking ahead, based on the numbers of current tenders, the most active markets are Saudi Arabia, with over US$ billion of projects at tender/ bid stage (41% of regional market), the UAE with US$114.6bn (31%), followed by Kuwait (10%), Qatar (9%) Oman (7%) and Bahrain(2%).

This projected future workload shows a greater bias towards oil and gas (up to 22% from 17%) and infrastructure markets (now 17% from 9%), with real estate remaining as the major market but slowing towards 46%.

 

projects in tender stage

 

INFLATION UPDATE

 

Following an unexpected spike in steel prices in recent reports the major commodities have experienced some correction, with Turkish Steel dropping to US$ 640/tonne (from a peak of US$ 820/tonne).

Most other major materials (glass, cement, metals) have continued their level trends. These commodities now look ready to fall in line with the global markets as they to begin a slow and steady upwards climb, (see glass and cement below).

construction commodities rate index Source: London Metal Exchange and our own suppliers

 

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