Kuwait construction poised to boom
Research firm finds that construction sector set to expand at CAGR of 7.45% between 2012 and 2016
Kuwait’s construction industry is poised for significant growth after a period of sustained government investment in infrastructure project and social facilities, a report by Research and Markets has found.
In a report by the Kuwait based Arab Times, the Irish based firm said that it expects the construction sector to expand at a compound annual growth rate of 7.45% between 2012 and 2016. It said that growth would be partly driven by new transport infrastructure, including the expansion of the airport and road projects.
In addition, there would be a step up in the construction of hospitals and other health care developments.
However, the research firm warned that the continuing lack of a 2012 budget would effectively mean that the government cannot sign off on any new projects.
The construction sector bore the brunt of the global economic crisis in 2009 as it registered a 9.8% drop in activity, which dragged the CAGR for the 2007 to 2011 to 1%. However, the contraction was partially offset by a strong performance from previous years, particularly in 2007, when construction expanded by 17.6%.
The raft of new projects is expected to put infrastructure, which accounted for around 48.1% of the construction sector’s value in 2011, back on track after it shrunk to about 1.3% during the five year period that ended in 2011.
Predictions now put the average annual growth at 8.85% over the next four years, Research and Markets said in their report.
A number of the Gulf Arab state’s major projects will be put out to tender, including the expansion of the Kuwait International Airport. Processes are already up and running for other key developments.
Earlier this year, Kuwait’s News Agency (KUNA) reported that up to 16 international firms had expressed an interest in bidding for the airport expansion contract, which is estimated to worth between $2.49bn and $2.85bn. It will include the construction of a second passenger terminal.
Furthermore, the research firm said that it saw ‘institutional construction’ as being a large factor in the growth of Kuwait’s construction sector. This was particularly evident in the healthcare construction sector, where on-going projects such as the $1.1bn Jaber Al Ahmed Hospital (scheduled to be the largest hospital in Kuwait) are fuelling the growth of the sector.
The government also plans to build nine more hospitals across the country, as it strives to meet growing demand from a growing population.
