GCC sees upsurge in construction projects

Among the key milestones predicted in the next twelve months, based on the research presented by Ed James, Head of MEED Insights, include an acceleration of project spending in the Saudi market. Last year, the Saudi government awarded close to US$70 billion in signed contracts, more than all the other GCC states combined, and is expected to increase expenditure as part of its ninth development plan. Qatar should start to see an upsurge in spending as World Cup gains momentum.

And it could be a pivotal year for Kuwait with many of PTB's projects due to be awarded as well as the US$30 billion downstream refining programme. His Excellency Mohammed Al Derajy, Iraq's Construction & Housing Minister, told the Arabian World Construction Summit that Iraq plans to build a total of 2.5 million homes by 2016.

The UAE cannot decrease much further and should start to rise again. "In 2010, 229 projects due to be awarded were cancelled; this number fell to 137 in 2011. It is down to 109 this year and is set to drop to about 30 in 2013 as developers commit to more commercially viable schemes," continued James.

A return to normalcy in Egypt could result in greater government spending, while high oil prices should result in stable spending levels in Iran. Libya has a huge potential that could possibly now be tapped with a new government in place. "We should also see an increase in project activity in Algeria as government pushes ahead with capital investment programme. As such, we believe total MENA contract awards will climb to about US$70-85 billion in 2012," James said.