According to DMG World Media Dubai, organizers of The Big 5, the region’s largest construction industry trade show, the civil construction boom across the Arabian Gulf is set to exceed SR1.2 trillion ($ 330 billion) by the end of this year alone. This estimate is currently more than 10 times the annual investment being made in the region’s cash-rich oil and gas industries.
“The hydrocarbon economies of the Gulf are now an international force with world-class companies creating windfall profits to help governments diversify away from oil,” said Bernard Walsh, managing director of DMG World Media Dubai.
“There are (currently) huge profits in the oil and gas industry but in 30 years from now — perhaps less — it may be a very different story, so diversification now is key to sustainable long-term growth. Unlike the previous oil booms of the 1970s and 1980’s, the region is investing heavily in infrastructure and its own future, which is clearly reflected in the current civil construction boom,” Walsh added.
At the center of the world’s most concentrated construction boom — Saudi Arabia and the United Arab Emirates have more than 3,800 active construction projects across the region involving commercial, education, health, residential, retail, hotel, leisure, entertainment and mixed-use buildings amounting to SR12.2 trillion ($ 3.5 trillion) under way or planned to begin shortly.
Saudi Oger is one of these companies awarded the Arabian Business Magazine award as the best construction company in the Kingdom recently signed a contract worth SR5.6 billion to build the north part of the mega Jabal Omar project as well as other major projects. Commenting on the growth of the construction market in the region, Mohammed Simeen, assistant head of communication at Saudi Oger in Riyadh said, “I believe the construction boom in Saudi Arabia and the GCC is expected to continue to grow due to the recent drop in petroleum prices, steel prices will also be reduced allowing for more projects to go ahead,” he said. The SR1.2 trillion value of the infrastructure projects comes at the end of a steep three-year climb from less than SR112 billion in 2006 and a contrast in investment in the oil and gas sector, where project value estimates are at SR112 billion or less per year in the two industries.
“The GCC countries recognize that they have been dependent completely on oil and gas and are trying to diversify their economies,” Walsh added. “Gulf countries have historically underinvested in their own infrastructure but have clearly realized the requirement to do so now.
