David Clifton, regional development director at Faithful+Gould, says Dubai and Saudi Arabia are two standout markets with regards to growth potential in 2018 and 2019
The decline of the Middle East construction industry is finally at an end, and recovery is on the table according to an article written by David Clifton, regional development director at Faithful+Gould.
The article, which can be found on the company’s website also said Dubai and Saudi Arabia are two standout markets with regards to growth potential in 2018 and 2019.
“2017 marks the uptick of recovery and the GCC’s re-entry to a growth environment for the industry. The worst is over. That’s not to say the next two years will be easy — far from it — but we are at last seeing some growth,” says Clifton.
The article notes that in the UAE contracts are now being actively awarded, following a couple of slow months at the start of the year. Drivers include the approaching Dubai Expo 2020 event, and a slightly earlier than expected return of liquidity in the global market, and the need to place and generate returns on capital.
Clifton notes that there will be some provisos however: “There are some caveats in that, whilst we are bouncing along the bottom of a UAE property price slump and a lack of GCC awards, over-ambitious towers may not see the light of day and instead be replaced by more feasible projects – or cancelled if they don’t make economic sense.”
In Saudi Arabia, the National Transformation Program and Vision 2030 reforms are gaining momentum, while alternative financing is also coming into its own, driving growth. “The implementation of PMOs and the alterations in ownership structures will also bring huge change and progress through to 2018. Alternative financing is now starting to establish itself, primarily in the power and water industries (IWPP and IWP). We are seeing the implementation of alternative financing now, with GACA moving forward with Yanbu, Ta’if and Ha’il airports,” adds Clifton.
Clifton concluded: “It’s a short window to mid/late 2017, but hold on — we won’t be back to where we were, but we are moving in the right direction, and, in typical Middle East style, now with pace.”