MIDDLE EAST (The Middle East countries are forecast to see 2.3% to 2.6% GDP growth in 2020):
The assassination of the most senior Iranian General in Iraq in early January by the USA and the possibility for the ratchetting up of future conflicts in the region could seriously impact the economies of a number of Middle East countries as we move into the 1st Q of 2020.
Qatar, KSA and the UAE are forecast to be the leading Middle East countries for construction activity and growth in 2020. A fair number of the regions countries continue to struggle with a slowdown in construction activity and cash flow problems as we move into 2020. Reduced oil revenues and the possibility of hostilities between Iran and Saudi Arabia are the reason for foreboding as we move into 2020.
The Saudi Arabian construction sector is facing some challenges as we move into the 1st Q of 2020. The latest attack on Saudi Arabia’s largest oil refinery is a significant increase in the conflicts between Iran, Saudi Arabia and the US. 80 % 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 undecided.
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.
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.
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. Engineering & Construction activity going into 2020 is forecast to be positive in Kuwait and Bahrain assuming Iran, Saudi Arabia & the US standoff can be resolved.
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.