MIDDLE EAST (The Middle East countries will see 2.9% to 4.5% GDP growth in the 4th Q of 2023):
The Saudi Arabia construction sector is booming with the influx of petrodollars over the last 18 months. The Saudi Arabia construction sector is predicted to prosper in the next 3 to 5 years after a challenging couple of years. Saudi Arabia is planning to build a number of major capital projects in the next 3 to 5 years. These projects include Neom a vast new high-tech city, the Mukaab is a 400-meter-tall office tower that will be the tallest structure in the Middle-East, the King Salman Energy Park, Oxagon a new floating city in the Red Sea, close to the Suez Canal, the new Riyadh Metro, one of the largest public transport capital projects in the world and the new Red Sea International Airport. These major capital projects and the ongoing infrastructure, mining and Oil & Gas construction sectors promises to make Saudi Arabia a very active location for construction in the 2nd half of 2023 and beyond. The capital projects are estimated to cost between $750 and $900 billion. Saudi Arabia inflation rate is between 2.6% and 2.9%.
Saudi Arabia’s construction costs (materials & labor) have increased between 2.5% to 3.2% in the last 12 month period.
The Vision 2030 initiative is a Saudi Government’s program to reduce Saudi Arabia’s dependence on oil look for billions of dollars to be expended on new infrastructure, energy, transportation, hotels, shopping malls, tourist resorts, new housing / villa’s, and commercial / industrial construction facilities in the next couple of years. Saudi Arabia has more than 70 new hotel / conference centers projects in the pipeline in 2023 / 2024.
All of the 2023 / 2024 future projected Middle East construction growth, particularly in the oil / refinery, energy petro-chemical / industrial and commercial construction will be fueled by $85 to $95 a barrel of crude oil.
The rising price & demand for oil could turn out to be a great boost for some Middle East countries that could benefit future Oil & Gas CAPEX construction projects. Construction is projected to steadily increase Qatar, UAE / Dubai, Bahrain and Kuwait over the upcoming years fueled for the most part by Oil and Gas revenues.