The construction boom on the Middle East carries on

Recent years has seen a boom in construction in the Middle East. The trend has been apparent in many developed economies since the upturn from the recession, as renewed investment in infrastructure and new developments are on the increase. In the Middle East at least, there's little sign of things slowing down in the short term.

Research suggests $114 billion USD was awarded in construction contracts in the Middle East last year. Saudia Arabia is expected to hold its position as the leading construction economy within the Gulf Cooperation Council (GCC) region in 2015, with year on year growth forecast at an impressive 10.5%. This is mostly due to large infrastructure contracts, but longer term investment is also expected in residential and non-residential construction.

 

High-profile global events such as the 2022 Qatar World Cup and the 2020 Expo in Dubai are also anticipated to have significant effect on the construction market. Last year, projects such as the expansion of King Khaled Airport in Riyadh and ‘The Fountain Views Development’ in Dubai boosted the collective GCC economy by almost $3 billion USD alone. The planned rail link between Saudi Arabia, Kuwait and Qatar, at a total cost of $200 billion USD, is likely to ensure that for the foreseeable future at least, the Middle East economy is worth watching very closely.

 

As well as hard materials and labour, there is of course, a knock on effect on the power generation market. Alongside utility and oil and gas, the construction industry is pushing the Middle East to the forefront of the power generator rental business, with Saudia Arabia leading the charge. Given the hot climate, generators provide a solution for the lack of power generated by permanent producers. Alongside Africa, it is expected that the market for power generation in the Middle East is to reach $9,048.25 million USD by 2019. Amongst the factors that are acknowledged as contributing to this growth include growing population, urbanization and customised standards of living.

 

According to recent reports, diesel is far outweighing gas as the fuel of choice for power generation rental. However, with the case of Qatar, which is hotly tipped to be using more power generation rental in the run up to the World Cup, there is also potential for natural-gas powered units, due to the abundance of localised gas facilities. A recent report by 6Wresearch has named the leading companies in power generation in Qatar as Byrne Investments, RSS, Hertz, JTC, Aggreko, Qatar Building Co., Qatar Industrial Equipment and Al Reyami.

 

The Middle East construction industry and specifically the power generation market, is showing signs for continued growth, with momentum building. Keep a watching eye.

 

Image by Pedro Moura Pinheiro used under the Creative Commons license.