CIC - Construction Intelligence Center

Recovery in the GCC

  • Published:Wednesday, August 01, 2018


Construction output will regain growth momentum in the member states of the Gulf Cooperation Council (GCC) in 2018–19, having endured a period of sluggish growth in the past few years amid the decline in oil prices and the subsequent impact on investment in the face of government austerity programs.

 

For all six member states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), construction output expanded by just 1.2% in 2017 and 2.4% in 2016, a marked slowdown from the annual average rate of expansion of 6.3% in the preceding three years. 

 

The region’s performance in 2017 would have been much worse had it not been for the surprisingly rapid pace of growth in construction in Qatar (at 20.4%). Saudi Arabia’s construction industry contracted by 2.4% in 2017, having already declined by 3.3% in 2016. Similarly, in the UAE, construction output 1.6% and 1.9% respectively in 2017 and 2016.  

 

However, with oil prices recovering in 2018 (in part on the back of an agreement between Opec and non-Opec oil producing countries to place a cap on oil production until the end of 2018), government investment in the region is set to pick up again, and overall economic activity will regain growth momentum. The IMF predicts that the six members of the GCC will grow by 2% in 2018, improving on the 0.7% growth recorded in 2017.
 

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