MIDDLE EAST (The Middle East countries will see nominal GDP growth in the 1st Q of 2021):
The pandemic has caused uncertainty in the Middle East economies, crude oil prices have dropped, 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 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 / buyout 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.
Large CAPEX dollar new green field upstream projects are just about impossible to fund, many national oil companies are turning their attention to smaller brownfield upgrades and de-bottleneck projects where the ROI can be enhanced. Numerous large Middle-East upstream and downstream Petro-Chemical & Gas megaprojects are currently being delayed due to labor issues and delays to key components. The current oversupply and low oil pricing levels is adding to this problem.
The falling demand for oil and the effect of the COVID-19 virus are a massive problem for Middle East countries. Look for continuing layoffs, downsizing, project delays / cancellations & major CAPEX reductions across all Middle-East construction sectors as we move into 2021.
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 2021.