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“GCC Powers of Construction 2009”: a spotlight on opportunities for growthDeloitte publishes industry insight on the sector’s future |
October 5, 2009 – Deloitte Middle East announced the release of its publication “the GCC Powers of Construction 2009”, which provides an analysis of the construction sector in all Gulf Cooperation Council country markets.
“The publication’s release comes at a time when many countries in the Gulf found that their high ambitions for real estate and construction were challenged due to the impact of the global financial crisis,” said one of the contributors to the report, Cynthia Corby, audit partner and construction industry leader at Deloitte in the UAE. “We have brought together expertise from Deloitte as well as key regional players such as Arabtec and Construction Products Holding Company (CPC) to give valuable insight into the impact of the crisis on the construction sector in the region as well as prospects for future growth and demand. The overriding message is one of “many opportunities still to be found”.
In terms of countries demonstrating strong potential, “the GCC Powers of Construction 2009” reveals that Qatar, Saudi Arabia and Abu Dhabi are leading the pack. In the case of Qatar, its gas-rich revenues are being used to fund investment in infrastructure and real estate development. In 2009, its construction sector is expected to grow by 17%. Saudi Arabia’s large population, pent-up real estate demand and drive to diversify the economy away from oil; all bode well for the Kingdom’s construction sector. Currently around 50% of all building developments within the Gulf is taking place within its borders. Abu Dhabi is anticipated to continue its strong construction performance thanks to the emirate’s 2030 plan which calls for a vast range of projects in energy, transport, industry, health care, education, government, agriculture and much more.
“In the future, governments are most likely to be the dominant force in breathing life into their respective countries’ construction sectors,” explained Rizwan Shah, who also contributed to the report, and the construction and capital projects advisory leader at Deloitte Corporate Finance. “Through leveraging their reserves, they will be able to stimulate their economies to create opportunities for construction and development. Emphasizing again that, education and health care as well as infrastructure are likely to be the sectors where most demand for building will lie in the future. Another emerging trend linked to this scenario is the increasing occurrence of public-private partnerships”.
In addition to looking at sources of demand in the future, “the GCC Powers of Construction 2009” also analyses the challenges developers face as a result of lessons learned from the downturn. These included managing cash flows with greater care, seriously assessing the risks of entering new markets and addressing rising finance and insurance costs.
The publication also includes very useful fact sheets on each of the Gulf markets summarizing key economic data for each as well as Deloitte’s view on each market’s strengths, opportunities, weaknesses and threats. This provides a valuable source of information for investors who may be contemplating entering these new markets.
“In the 80 years that Deloitte has been in the Middle East, we’ve played a leading role in driving the construction sector forward to achieve growth - and helping businesses manage risks and uncertainty forms an integral part of this,” commented Saba Sindaha, regional managing partner at Deloitte in the UAE. “The “GCC Powers of Construction 2009” represents a new addition to our range of services to clients by offering thought leadership on many of the pertinent issues that will dominate how business is done in the coming months and years.”
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To download the report, click here.
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