MIDDLE EAST (The Middle East countries will see nominal GDP growth in the 2nd Q of 2021):
The long-drawn-out & fragmented rollout of vaccination programs is a serious challenge in many Middle Eastern countries that could take another 3 to 6 months to see positive results.
COVID cases in Saudi Arabia have risen to more than 5000 a day, for the first time since October 2020, the absence of wearing face masks & social distancing is thought to be the main reasons. Saudi Arabia has seen more than 385,000 COVID cases that have resulted unfortunately to close to 7,000 casualties.
The UAE has seen 450,000 + confirmed COVID infections resulting in close to 1,450 people have perished from the virus.
Marine traffic through the Suez Canal was blocked for more than a week, causing a traffic jam of more than 250 ships, carrying more than $10 billion of goods. Many ships were rerouted around Africa, increasing shipping/freight costs by as much as $150 million & causing significant delivery delays of goods & equipment.
The pandemic has caused uncertainty in the Middle East economies, construction has seen labor shortages & travel restrictions on 3rd world construction labor resources.
The impact of the pandemic in the Middle East will still be around for the next 3 to 6 months. The Middle East construction sector is still dealing with the aftereffects of COVID-19 and is currently trying to lessen the problem.
A few countries continued construction activity, while others either completely or partially closed down, long lead equipment and bulk material delays and worker testing is still a challenge. Construction activities in most Middle East countries are starting to gradually move forward again as we transition into the 2nd half of 2021.
Taking on new personnel/staff & construction workers from other countries remains a major challenge in many countries. Some countries are requesting workers from other countries to be quarantined for 14 days, the cost and logistics of this is significant. Delays in procurement / buy out of materials and equipment from countries such as China, Italy, France, and the USA and the associated costs of mitigating these delays persists in being a problem. Extremely exacting safety measures have been introduced which will increase costs and negatively impact construction productivity. Many migrant construction workers returned to their home countries and are experiencing difficulties in returning back to the Middle East.
The rising price & demand for oil could turn out to be a great boost for Middle East countries that could benefit future Oil & Gas construction projects.
Qatar, Jordan, Kuwait, Libya, the UAE & including Saudi Arabia are all in the same boat as many other countries, these countries are pronouncing new hygiene& travel restrictions, procedures & protocols as the number of Coronavirus infections keeps ramping up.
The pandemic has the potential for all Middle-East future or current ongoing construction projects to be delayed or worst case postponed. The economic impact and fallout of the Coronavirus still needs TBD as we transition into the 2nd half of 2021.
However, there is light at the end of the COVID tunnel, we are starting to see signs the COVID-19 epidemic is starting to weaken in some Middle East countries.