Rollout of several megaprojects for the energy, industry and transport sectors, and projects for affordable housing and high-end commercial facilities to benefit construction sector
A new report by Oxford Business Group (OBG) has found that the construction industry in Bahrain is likely to play a significant role in the country’s economic growth in the future as the GCC member looks to shift towards a knowledge-based economy against a backdrop of lower oil prices and fiscal reforms.
According to the report, the construction industry is benefitting from the rollout of several megaprojects for the energy, industry and transport sectors, alongside programmes for affordable housing and high-end commercial facilities. It also charts the performance of Bahrain’s manufacturing industry, which is now the second largest contributor to non-oil GDP and is successfully attracting higher levels of FDI.
Also mapped out in The Report: Bahrain 2020 is the growth underway in value-added production, with the food and fast-moving consumer goods (FMCG) segments both gaining momentum. Another major driver of non-oil growth is the banking industry, which accounts for more than 16% of GDP and has carved a niche as a regional hub, it said.
Analysed in the report are the measures introduced to ensure the banking sector retains its leading position within the GCC, which range from new regulatory reforms through to the introduction of financial technologies.
Furthermore, despite the oil and gas sector’s share of GDP falling to 18.1% in mid-2019, the report finds that it continues to play a major role in driving Bahrain’s economy. Also considered is the impact of the major oil and gas find in the Khaleej Al Bahrain basin, which could boost production four-fold.
In addition, the OBG report also examines the modernisation programme underway at the Sitra refinery, looking at the part it will play in boosting throughput.
Commenting ahead of the launch, OBG’s editor-in-chief Oliver Cornock said that while the oil price crash of 2014 had heightened the need for fiscal reforms, the kingdom was well placed to tap investors for a range of initiatives across the sectors of its economy.
“Bahrain benefits from being one of the most diverse economies in the GCC, supported by a well-established financial services industry and robust industrial and manufacturing sectors,” stated Cornock.
“Having taken steps to balance the budget, the kingdom will now be looking to its big-ticket infrastructure projects and attractive investment climate to drive new growth,” he noted.
OBG’s managing director (Middle East) Jana Treeck said Bahrain’s diversification drive had also led to a sharper focus on value-added and downstream activities.
“The kingdom’s manufacturing sector is proving to be a major draw for investors, with aluminium, petrochemicals and newer segments, such as FMCGs, all earmarked for growth,” stated Treeck.
“With FDI levels expected to continue rising, we expect these segments to propel the industry forward and play a key role in job creation,” she added.
The Report: Bahrain 2020 contains a viewpoint by King Hamad bin Isa Al Khalifa, together with a detailed sector-by-sector guide for investors.
It also features a wide range of interviews with other high-profile personalities, including Bahrain Economic Development Board CEO Khalid Humaidan; National Bank of Bahrain CEO Jean-Christophe Durand; Bahrain Petroleum Company CEO Pete Bartlett; Aluminium Bahrain (Alba) CEO Ali al Baqali and Batelco CEO Mikkel Vinter.
The Report: Bahrain 2020 marks the culmination of over 12 months of field research by a team of OBG analysts. It has been produced with Zu’bi & Partners, Attorneys & Legal Consultants, and the Bahrain Bourse.