Oil-rich Middle Eastern countries are pinning their hopes on oil prices remaining above $65 a barrel range, if that’s the case then 2019 will be a good year for construction in this region of the world. The Middle East’s EPC sector is forecast to expand at a faster rate than any other region in the world at between 3.5% and 5.5% in 2019. New construction of Oil / Gas and Infrastructure related facilities is set to see sustained growth in Saudi Arabia next two years as the demand for oil related products continues.
70 % of Saudi Arabia’s annual revenue is based on oil sales, there should plenty of construction opportunities in 2019 if oil remains at its current price which is very likely, now that the US has imposed an embargo on Iranian oil sales. Saudi Arabia has a new and young leader Crown Prince Mohammad bin Salman, he is being groomed for the future role of King and has many ideas on how to improve the economy of Saudi Arabia. Unemployment is currently in the 12% to 13% range, reducing the number of expatriates and using more locals is a challenge that is major goal of the Government. A lot of social changes are ongoing in Saudi Arabia look for this situation to continue in the future. The Saudi Arabian Government is trying to reduce the countries dependency on its oil industry and its oil exports by investing in non-oil related business’s, look for this trend to continue in 2019 and beyond, in the meantime with oil trading above $65 a barrel look for continued substantial CAPEX expenditures on oil related projects in 2019 and beyond. The housing / residential / commercial/ infrastructure construction sectors are also expected to see growth opportunities in 2019 and beyond, the ongoing conflict in Yemen continues to drag on.
Abu Dhabi is the most expensive Gulf Cooperative Council country for construction services. Abu Dhabi is forecast to spend more than $25 billion on oil / gas, infrastructure and commercial construction projects in the next five years. Some Middle East / North African countries such as Egypt, Libya, Syria, Jordan and Algeria continue to endure political and economic stagnation. Activity is down perhaps 5% to 10% from 2 to 3 years ago, but the outlook for construction work still remains somewhat positive in the (GCC). Israel’s economy and construction market continue positive as we move into 2019. There are plenty of energy and non-oil related construction projects and opportunities that are still to be had.
Qatar will carry on being one of the world’s fastest growing economies and construction markets even with the economic related boycott from its neighbors. Qatar is affluent with its enormous offshore gas fields. Qatar is currently focused on its ongoing construction / infrastructure work related to the 2022 World Cup.