Qatar’s construction sector will continue to achieve the strongest growth in the GCC regardless of the fate of the Fifa 2022 World Cup, according to a new report.
BMI Research forecasts the Qatar market will grow at an average rate of 10.2 per cent over the next decade. It said Qatar’s construction sector recorded year-on-year growth of 11.4 per cent in the first quarter of the year, which was slower than the “hugely impressive” 18 per cent growth registered in 2014 as a result of the start of a number of major infrastructure projects.
The sector is forecast to grow by 13 per cent this year on the back of further infrastructure work and an uptick in real estate projects, BMI said.
Although fears over hosting of the World Cup re-emerged following the announcement by Swiss police that they are investigating the awards of the 2018 and 2022 events to Russia and Qatar, the report states that although growth might slow if any action were taken, “the majority of major projects would move forwards”.
“Doha’s metro network is still needed to alleviate congestion, albeit with fewer stations,” the analysts said. “Doha’s port will still need to be expanded to compete regionally, and Qatar’s future economic growth will still need expanded power and water capacity.”
BMI added that even if Qatar was stripped of the competition, GDP growth in the country was still likely to be in excess of 4 per cent per year.
Construction costs have also been identified as another potential issue, with a 2014 report by the consultancy Arcadis identifying Qatar as the most expensive market in the Middle East.
However, BMI Research highlighted recent moves to alleviate this, including a deal signed last month by the country’s public works authority, Ashghal, with Qatar Primary Minerals to provide millions of tonnes of basic building materials including limestone and gabbro aggregates at a fixed price over a five-year period.
Rachid Mikati, a director of Arabian Construction Company, said Qatar remained a good market for contractors. His firm has been active in Qatar since the 1970s.
Mr Mikati said that one of the key challenges for contractors was to ensure that they properly price for the cost of inflation over the lifespan of a project.
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