Bank of America Merrill Lynch (BofA) has said Saudi Arabia is expected to lead the Middle East and Africa (MENA) region in infrastructure investment and construction spending, as the kingdom responds positively to pressing social needs such as labour, housing and education.
“Due to many years of underinvestment, we expect Saudi Arabia to take the lead in terms of construction spending in the MENA region,” said Philip Southwell, BofA Merrill Lynch president and country executive, Middle East and North Africa.
Governments in the region are predicted to invest a total of $4.3trn in construction projects by 2020, up 80% from their current level.
The construction sector would continue to its solid performance this year, despite a 41% year-on-year decline in contract awards during the first five months of 2012, the report said.
“The construction and infrastructure sub-sectors in Saudi Arabia, however, remain strong, growing by 177% over the same period, and currently accounting for 46% of the 2012-2013 MENA project pipeline totalling $448bn,” Mutashar Murshed, CEO of Merrill Lynch Saudi Arabia said in the report.