Construction projects awarded across the GCC are forecast to reach $195.67 billion this year, an increase of nearly $35 billion compared to 2013, according to a new report.
Contractor awards in the building and infrastructure sectors will make up $134bn by the end of this year, up from $119.05bn in 2013.
Saudi Arabia with $64.29 billion constituted the largest share of the contracts awarded in 2013, followed by the UAE at $28.06 billion while the UAE, Qatar and Saudi Arabia are likely to lead growth in the construction market over the next few years.
Ventures Middle East said in the report for the Big 5 construction conference that all GCC economies except Bahrain and Oman are projected to continue expansion for the next six years, with heavy investments planned irrespective of their budgetary balances.
It said that between 2014 to 2019 there is likely to be "tremendous activity across the key focus areas of the budgets, primarily infrastructure including transportation, roadways, airports and ports and tourism".
The report added that with the UAE hosting the World Expo in 2020 and Qatar the World Cup FIFA event in 2022, these two economies along with the largest construction market Saudi Arabia are likely to be the key economies to watch out for in the next few years.
"While these events are definitely giving the required boost to Dubai, Abu Dhabi and Doha where these events are scheduled to be hosted, the spillover effects of the heavy construction and economic activity surrounding these events will feed the growth of the region’s building construction sector," Ventures said.
It also noted that the growing needs of the region’s population is also likely to have a positive impact on the construction sector.
After a brief lull in 2013, the report said GCC governments took stock of the existing progress made toward their developmental goals, the pace of project development and the continued global and regional turmoil, and decided to push their spending in 2014.
Large budgets were allocated toward speeding up projects in the infrastructure sector and resuming mega projects earlier slowed down or put on hold across key markets such as Saudi Arabia and the UAE, leading to these nations being perceived by global investors as a safe haven for investment.
But the report warned that the biggest challenge all nations in the GCC are likely to face in their growth will be the heavy demand on the materials and labour as countries compete to build within the given resource constraints.