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Insights on the construction industry in the GCC

Deloitte ME publishes “GCC Powers of Construction 2009”


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Introduction

The data for this publication has been collated from various public sources. Alongside our analysis of this data, we provide commentary from Deloitte specialists and key industry players across the region.

Meet the senior executives

For our first GCC Powers of Construction publication, we invited senior executives from two major regional players, to provide their perspectives on the industry’s future. 

Expert view from Deloitte

The GCC Powers of Construction also contains a range of articles on industry themes and trends. With the publication coming at a time of a global economic downturn, it would be impossible not to include an analysis of the effect of the downturn on construction in the GCC. We begin by looking at how the sector shifted from one a boom era throughout most of 2008 to an era of project cancellations and decline in available financing for this industry by the end of the year. Although Dubai’s fortunes, especially in terms of residential developments, were hard hit by events, other places in the region – such as Abu Dhabi, Qatar and Saudi Arabia - continue to show promise, while public spending on infrastructure and commercial projects represent opportunities in times ahead.

With the downturn forcing developers to look beyond their home markets for opportunities, we also present an analysis of the impact of the downturn on construction in the UK. The UK has been one of those countries most in the headlines for its economic woes as a result of the crisis. However, we present our opinion on why its construction industry is in a position to tackle a downturn in construction activity. In our analysis, we also highlight the importance of infrastructure as a source of business in the years to come.

Strategies for surviving these economic troubled times is examined in “Strategy, Governance, Risk Mitigation and Dispute Avoidance”. These four areas are essentially the foundations upon which contractors and owners need to build in order  to ensure their longevity in the market. By starting out right – with the necessary frameworks in place – industry players are ensuring the optimum conditions for finishing right. As well as examining in detail the four areas of strategy, governance, risk mitigation and dispute avoidance, we pinpoint the countries and sectors of activity in the region that present the greatest opportunities.

Expert view from Clyde & Co

For a legal angle on the impact of the credit crunch, we invited Clyde & Co to contribute their expertise on the phenomenon of projects being cancelled in the GCC. Estimates place the value of such canceled projects at US$1.9 trillion, a hefty statistic which has been accompanied by the number of disputed cases at Dubai International Arbitration Center rising in the first four months of 2009. In Clyde & Co’s article, recent trends and common scenarios are explored to shed some light on what the future of dispute resolution may hold.

Country profiles

In our country profiles section of the GCC Powers of Construction we present key data on market statistics, trends and strengths and weaknesses for each country in the Gulf region. We hope that this will provide a user-friendly snapshot of each economy and also act as a valuable source of information when analyzing where the best opportunities now lie.

The fact that this publication comes at a time when the region is re-examining its practices to date and adjusting to new economic realities means that it offers a pertinent overview of where the construction industry is at and where it is heading. Along with analysis from our experts as to the best strategies for survival, it is my hope that this new publication by Deloitte proves to be an essential guide for those both in the industry and observing it.

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