Experts see robust ME construction sector

Despite new threats posed by political unrest and a distinct lack of robust business continuity plans in place to provide protection in a high risk market, the Middle East construction industry has great potential for sustained growth, industry experts say.

In addition to Saudi Arabia and Qatar, which both present the biggest opportunities, India is seen as a prime market for growth, while Kuwait and the Emirates of Ajman and Fujairah in the UAE, also have significant potential.

In a white paper examining the opportunities and challenges facing the construction industry in the Middle East in the wake of economic and political turmoil, the energy, infrastructure and healthcare sectors are singled out for presenting the most lucrative business opportunities.

Published by Informa Exhibitions, organisers of CityBuild Abu Dhabi, the Middle East's premier event for construction products, the report underlines an urgent need for more nationals to be brought into the industry.

It highlights that the construction business needs to be less dependent on expatriate workforces, and also must look towards new markets to find business, rather than rely too heavily on markets it knows.

Re-building the Middle East

The white paper, "Re-building the Middle East", is the result of a round table discussion attended by delegates who will be addressing next week's CityBuild Construction Summit 2011, and experts in the Middle East construction industry. Kevin Brass, a business reporter with The National, was the moderator.

The panel of industry experts warned that companies operating in high risk markets in the Middle East are in danger of collapse in the event of financial crises, civil turmoil and natural disasters, if they do not develop strong business continuity plans.

"Many big organisations do not have a business continuity framework in place," said panellist Ahmed Alkhatib, Abu Dhabi General Manager of BSI, the standards, management systems assessment and certification specialists. "Some have a business continuity plan but not a real, rehearsed business continuity framework".

Stephen Lines, Gulf Ambassador with the Chartered Institute of Building (CIOB), warned of the danger of a "knee jerk reaction" to the recent political upheaval. He stated that construction companies operating in the Middle East lack robust recovery strategies and must build contingency plans on a geographical basis in order to survive.

While identifying a fear in the current climate that the Middle East lacks opportunities for the construction industry as more countries are seemingly 'closed off' for business, the white paper points to a wealth of possibilities for the sector.

Lines said Saudi Arabia was: "a booming and massive market and certainly not an area where I would see any major upheaval." Another of the industry experts, Jim Drysdale, Director MENEA, Royal Institution of Chartered Surveyors (RICS), pointed to Qatar's US$12 billion "infrastructure spend" in place even before the 2022 FIFA World Cup bid win.

While Bahrain, Egypt and Libya need time to recover, re-group and re-focus, Lines maintained that the world cannot afford to let Libya, which has the world's sixth largest oil reserves, "slip into turmoil for too long." He said: "We've seen what's happening already with the price of oil and I would like to think that we don't try to impose too much on the Libyans, but help them develop their resources and the future of the country."

Lines believes that, while there has been a visible redistribution of industry talent throughout the region in the last year, political instability in Egypt, Libya and Bahrain may result in a return of talent to the UAE. He pinpointed the UAE as one of the most stable markets in the regioAir Jordan