The GCC construction industry is confident of surviving the challenging environment that has emerged due to the coronavirus as it began 2020 on positive note by announcing new projects, experts say.
In February, GCC construction remained on track and posted strong growth in terms of new project announcements, with the UAE taking the lion’s share of the projects.
Work on the construction and infrastructure projects continues apace in the country and region despite several restrictions due to coronavirus, which will help the industry to sustain in challenging times and also keep it from job losses, the experts said.
Regional government have made it mandatory for most of the sectors to apply work-from-home framework in order overcome the outbreak of Covid-19 but construction sector is exempted from work-from-home regulations.
Though there are few challenges on the supply chain side, developers believe that if Covid-19 is successfully contained in two-month time, construction activity will pick up further and firms will be able deliver most of the projects in time.
Data from the BNC Projects Journal showed that new project announcements in the GCC shot through the roof in February with $17.5 billion worth of new announcements, a 12 per cent increase over the same month last year, in spite of the worrisome situation and an uncertain future.
The UAE contributed the lion’s share with 62 per cent or $11 billion contribution to the total value of projects announced last month while sector-wise, the oil and gas sector emerged as the top performer with 71 per cent contribution to the overall announcements.
But the GCC construction market registered negligible month-on-month movement as there was a 5 per cent year-on-year growth, led by Saudi Arabia and Oman which each grew by around 12 per cent Year-on-Year. The oil and gas sector grew by 21 per cent YoY, followed by the utility and the industrial sector that recorded 9 per cent and 5 per cent YoY growth respectively. The transport sector, however, has contracted by 5 per cent YoY.
The UAE construction market was on a roll last month as it also contributed 53 per cent or $4.24 billion to the total value of the contract awarded in the GCC last month which stood at $8 billion. The utility sector drove the contract awards with a 39 per cent share followed by the urban construction sector with a 30 per cent share to the total value of contract awards.
While projects worth $15.7 billion were completed across the GCC, led by Saudi Arabia and the UAE each having a 26 per cent share while the urban construction sector contributed to 38 per cent of total completions last month, it said.
In the UAE, project completions were however 50 per cent lower than the monthly average last year with the urban construction sector driving 73 per cent of the total completions worth $4 billion. The oil and gas sector grew by 20 per cent year-on-year, however, a six per cent year-on-year drop in the urban construction sector restricted the overall year-on-year growth of the UAE construction market.
In Saudi Arabia, projects worth $2.4 billion were awarded last month primarily driven by the urban construction sector while new projects worth $600 million were announced. Project completions stood at $4 billion led by oil & gas and the urban construction with 48% and 38% contribution respectively.
“Now at the cusp of a true and unprecedented global disaster that dwarfs regional and local challenges, businesses must realign to an emerging new reality,” said Avin Gidwani, CEO of Industry Networks, which produces the Journal.
“Travel, hospitality and education may evolve in ways that were unexpected and unimaginable. The fields of energy and the environment will transform either backward or forward depending on whether fear of another disaster triumphs over greed fueled by a myriad of new opportunities. The way businesses work and the way society functions will adapt. The role of technology will accelerate in every facet of life. All this will lead to changes in every element of the construction landscape,” said Gidwani.
Khaleej Times
29/03/2020
