The value of 21,893 GCC construction projects reaches AED 8.8 trillion
The total value of 21,893 active construction projects in the GCC reached $2.4 trillion (AED 8.8 billion) at the beginning of September 2017, according to according to MENA project research and intelligence provider, BNC Network.
Of these, the total value of urban construction projects reached $1.18 trillion (AED4.34 trillion) in September 2017, the BNC Construction Intelligence report shows, reflecting the buoyancy of the project market and the fact that the governments of the six Gulf countries are determined to carry out the important infrastructure projects.
The urban construction contracts constitute 80 per cent of the contracts awarded for all sectors in GCC and in dollar terms this translates to 49 per cent of the total contracts awarded.
“The governments and the private sector developers of the GCC region appears to be unmoved by the slowdown in the global economy and the lower oil price environment. Our latest GCC Construction Intelligence report shows that the projects are going ahead despite the challenging global economic situation. This is very good news for the businesses considering the overall global economy where countries are trying to push the economic growth rate to a slightly higher level,” said Avin Gidwani, Chief Executive Officer of BNC Network.
He added that the continuation of these projects, worth AED 8.8 trillion, will keep many businesses, especially the sub-contractors, in business and help save millions of jobs across the region. If these projects continue as planned, it is possible that the region will not only be saved from a possible recession and job losses, but could also ensure stronger economic growth across the region.
The GCC constitutes 85 per cent of all active projects in the MENA and in dollar terms, these projects account for 68 per cent of the total estimated value.
The report, released on the eve of the Cityscape Global exhibition that takes place at Dubai World Trade Centre from 11 to 13 September, is expected to see a flurry of new project announcements.
“Over the last few days, we have seen a number of new projects being announced, including a Dh24 billion mixed-use master-planned project in Sharjah, in addition to a AED 3 billion new neighbourhood near the University City at Juraina in Sharjah as well as a AED 1.5 billion tower to be managed by Shuaa Capital,” said Gidwani. “Earlier, Wasl Asset Management Group has announced Wasl 1–a new mixed-use freehold community next to Dubai World Trade Centre–that expands the freehold areas into the traditional downtown of Dubai. These are exciting times for all those living in the GCC and the UAE–where most of the economic development activities are happening and we are passing through an exciting time.”
The value of the oil and gas projects in the Gulf region has reached $331 billion (AED1.21 trillion), while the total value of utility project in the Gulf reached $302 billion (AED1.1 trillion) in September 2017, the report shows. The total value of industrial projects reach $181 billion (AED 666.47 billion), according to BNC Network, which will help the region to become self-reliant and less dependent on imported products–as the completion of the industrial projects mean they will produce value-added products.
“Events such as Expo 2020 Dubai along with stabilisation of the oil price and the drive of the various GCC countries to achieve economic diversification and increase in the living standards will play a vital role in the construction industry contract awards. As the economic growth is expected to pick up pace next year, we expect an increased construction activity across the board in 2018. New project announcements by major developers that have taken place from 2016 till now – will go into tender next year and trigger increased construction activities across the GCC,” said Gidwani.
In August, the number of active projects in the GCC increased by two per cent as compared to July, 2017 and the total estimated value of these projects increased by one per cent; these are a reflection of the ground realities of the GCC economy–and shows that the Gulf countries are investing their wealth more carefully and intelligently, to build a brighter future and more sustainable economies, according to Gidwani.
A total of 142 active projects with a combined estimated value of $14 billion moved to construction from other stages during the month. The largest project to be awarded in August was Phase 1 of Duqm Oil Refinery located in Oman worth $2.75 billion
A total of 596 active projects with a combined estimated value of $13 billion were completed during the month. The largest project to be completed in August was the Presidential Palace project located in Abu Dhabi.
In August, 90 active projects with a combined estimated value of $15.6 billion were put on hold in the GCC. The largest project to be put on hold was Section 1 of Phase 1 of Makkah Mass Rail Transit (MMRT) System located in Makkah, Saudi Arabia