The next ten years will witness massive economic growth for the Middle East and Northern Africa (MENA) region, due to the increase of productivity of the non-oil sectors. Saudi Arabia is forecasted to be the frontrunner when it comes to construction spending; meeting the supply and demand of labor, housing, and education.
The MENA contract awards pipeline for 2012-2013, by country and sector, is worth a total of US$ 448bn. The pipeline entails sectors as Construction, Industry, Infrastructure, Oil & Gas, Petrochemicals and Power, and leading Qatar, Egypt and the UAE is Saudi Arabia. The Saudi 2012-13 project pipeline accounts for 46% of total MENA project pipeline
According to a study by BofA Merrill Lynch Global Research Report, 'GCC 2020: Time to Shift Gears', when it comes to the KSA 2012-13 project pipeline, which totaled US$ 204bn, construction took the lead with 31%. The study added that the Construction & Infrastructure sub-sectors have grown by 177% in Saudi Arabia, in the first half of 2012.
Power plants and transmission and distribution were indicated to be, according to Business intelligence firm BMI, the Saudi construction industry’s most dynamic subsectors, noting that $ 80 billion has already been allocated for a 10-year electricity infrastructure plan that will extend to 2020 .
BMI’s Saudi Arabia Infrastructure Report Q1 2013, highlights that the vast opportunities giving growth to the construction sector, after power plants and transmission and distribution, entail: A thriving transport sector-especially rail infrastructure-with projects worth US$24bn under way or in the pipeline, investment into the social infrastructure sector, promoting the private sector’s participation in the construction sector, a new mortgage law which has been approved and will give way to a significant increase in credit growth and construction activity, and religious tourism with plans to increase its current hotel capacity of 53,000rooms (32,000 of these are in Mecca and Medina), by 60% over the next few years.
Global Construction Perspectives and Oxford Economics predict a total of US$4.3tn will be spent on construction across the MENA region by 2020, representing growth of almost 80% to 2020.
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