The Middle East / Gulf region continues to grapple with a slowdown in construction activity and cash flow problems as we move into 2020. Lower oil revenues and the possibility of hostilities between Iran and Saudi Arabia are the reason for this slowdown. Look for this situation to get worse before it gets better. 75 % of Saudi Arabia’s annual revenue is based on oil sales, there should plenty of construction opportunities in 2020 if oil remains at its current price which is somewhat uncertain.
The Saudi Arabian construction sector is facing some serious challenges as we move into the 4th Q of 2019. The recent attack on Saudi Arabia’s largest oil refinery is a significant increase in the conflicts between Iran, Saudi Arabia and the US.
Iraq’s construction sector continues to experience solid growth as we move into 2020, a number of large Infrastructure (roads & bridges) together with various Industrial projects (power plants & refinery upgrades) have recently been announced. The cost of these projects is in excess of US $20 billion to be spent in the next three years. Iraq’s overall economy has experienced a positive makeover in the last two years.
Engineering & Construction activity in the remainder of 2019 & going into 2020 is forecast to be positive in Kuwait, UAE & Saudi Arabia assuming Iran & the US standoff can be resolved.
In Qatar 1,000’s of third-world country construction workers are striking over not receiving their monthly wages is this a harbinger of an economic downturn.
Oil-rich Middle Eastern countries are pinning their hopes on oil prices remaining in the $60 to $70 a barrel range, Saudi Arabia recently indicated that they would be happy to see $70 a barrel for the next couple of years, if that’s the case then 2020 will be a reasonable year for construction in this region of the world
The big wild card is Iran, how will the Trump administration react to the recent hostilities in the Persian Gulf.
Abu Dhabi is the most expensive Gulf Cooperative Council (GCC) countries for construction services. Abu Dhabi is forecast to spend more than $25 billion on oil / gas, infrastructure & commercial construction projects in the next five years. Construction activity is starting to slow down perhaps by 5% from a year or two back, however the outlook for construction work still remains somewhat positive in the (GCC) region.
Israel’s economy & construction market continue positive as we move into the 2nd half of 2019. There are plenty of energy & non-oil related construction projects & opportunities that are still to be had.
Some Middle East / North African countries such as Libya, Tunisia, Syria, Jordan & Algeria continue to endure political & economic stagnation that translates to a lackluster construction sector.