25% of Mideast construction jobs delayed, cancelled

Proleads research also shows that 48% of region's project still being executed.
CONSTRUCTION INDUSTRY: 48 percent of construction projects in the Middle East are being executed, according to new research. (Getty Images)
By Andy Sambidge
Wed 10 Mar 2010 12:40 PM

About 48 percent of the Middle East's construction projects are being executed while another quarter have been delayed or cancelled, according to new figures published on Wednesday.

Research company Proleads said there were around $500bn worth of building projects in the region.

Of these, it said 48 percent were being executed, 27 percent were in the pre-execution phase while 20 percent were on hold and 5 percent had been cancelled.

Its research showed that the construction sectors in Saudi Arabia and Qatar had been least affected by the global downturn, led by government-related investment.

Emil Rademeyer, director, Proleads Global, said: “With a large and young population, Saudi Arabia has domestic demand that will ensure growth in all sectors as young Saudis enter the workforce every year.

“The government has prioritised job creation. This in turn requires heavy investment in infrastructure such as power, water, utilities, transport and healthcare. In addition, with the oil price comfortably above $70 and forecast to remain there, many infrastructure projects are certain to come to fruition. Therefore, the medium term outlook for Saudi Arabia in particular is positive.

“Qatar, with massive revenues from gas, has probably the least worries about liquidity in the GCC. Isolated by long term pricing agreements, Qatar remains unaffected by oil commodity fluctuations. Moreover, the Qatari government is working to ensure its infrastructure will rival the best in the region."

He added that despite the fact that the UAE had been worst hit, it still had the highest levels of construction work.

“Although the UAE has been hit, in particular Dubai, the level of construction work nevertheless is still the highest in comparison to neighbouring countries. Thanks to Abu Dhabi, 2010 will be a lucrative year for the Emirates. Longer term demand may take a few years to catch up with increasing building supply coming onstream.”

Graham Wood, group director of CityBuild Abu Dhabi, a new trade show for the construction industry taking place in April, said government-led investment in major infrastructure was helping to reduce contraction in construction activity in the GCC.

“Government or government-related investment in shipyard, seaport and airport expansions; new hospitals, colleges and universities; as well as major road upgrades now make up a  significant and growing proportion of the region’s construction activity,” he said.

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