Oman construction sector tipped for growth

Major international investment has begun filling the funding gap caused by reduced government spending – analysts


Oman’s construction sector is expected to post a healthy growth in the coming years, following major international investments into Duqm, analysts have said.

Global investors, mainly from China, have begun to fill the fundraising gap caused by low oil prices and the subsequent cuts to government spending on infrastructure projects.

According to a report by the Oman Daily Observer, analysts predict that the Sino-Oman Industrial City – the result of the Omani government’s efforts to involve private partnerships in major projects, will help underpin growth in the sultanate’s construction industry.

This will accelerate growth from an unexpected 2.4% this year – the lowest since 2000 – to 4.9% by 2019, the analysts said.

“Although Oman possesses a degree of private investment in its construction sector, the state still plays a pre-eminent role in funding infrastructure projects, and as oil accounts for approximately 85 per cent of government revenue, the collapse in price has had a negative impact on its ability to finance projects,” David Lee, an infrastructure research analyst at Business Monitor International, was quoted as saying in the report.

Meanwhile, a number of sectors are expected to show healthy growth, with transport, electricity and water projects all likely to see strong improvements over the medium term.

“Growth in Oman’s construction sector will come primarily from investment in transport infrastructure projects and the government’s push for private partnership to mobilise investment in the construction sector. This will become increasingly important as global oil prices remain low, curbing government spending,” Lee said.

Residential and non-residential construction is also expected to receive a boost, supported by a growing tourism industry and popular support for social infrastructure projects.

In May 2015, an agreement was signed between Oman and China, which would see a consortium develop three separate zones – heavy manufacturing, light manufacturing and a mixed-use area.


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