By Andy Sambidge
New report indicates growth of 80% over the next decade, outpacing global growth rate
A total of $4.3 trillion is forecast to be spent on construction in the Middle East and North Africa region over the next decade, representing growth of 80 percent, a new report said on Wednesday.
The report, sponsored by PricewaterhouseCoopers and carried out by Global Construction Perspectives and Oxford Economics, predicts growth in global construction will outpace world GDP growth over the next decade.
The report, Global Construction 2020, forecasts that global construction will grow by 67 percent from $7.2 trillion to $12 trillion annually by 2020.
The MENA region is expected to outpace the global growth rate, driven by population increases, economic growth, the desire for diversification and, in some cases, preparations for global sporting events, particularly the 2022 World cup in Qatar.
In fact, the report highlights Qatar as the fastest growing construction market.
Important facilitators of construction growth in the region are expected to include changes to mortgage laws in Saudi Arabia, driving residential construction, and more private participation in infrastructure investment across the region.
The report cautions, however, that recent unrest in the region may delay the growth in construction in some areas.
Mohammad Dahmash, PwC's leader of real estate, construction & engineering for the Middle East said: "Particular emphasis will be placed on social and affordable housing to meet the needs of the growing indigenous populations.
"The procurement process is also getting sophisticated and many countries within the Middle East have started applying 'Build Operate Transfer' and 'Public Private Partnership' schemes which not only help in financing projects but also ensure the efficient implementation and execution to international standards."
Charles Lloyd, PwC's head of capital projects and infrastructure for the Middle East and North Africa added: "This report shows that the MENA region is likely to continue to be a major source of growth in the global construction market.
"Demographic factors, economic growth and regional Governments' pursuit of more balanced economies will all be powerful stimuli of construction demand."
The report also highlighted continued rapid growth in construction in China and India and a rebound in the US market.