Qatar remains the stand-out market, recording the highest investment ratio within the GCC and also having a strong operating environment


By Pratap John/Chief Business Reporter


Exposure to Qatar and the UAE offers construction companies not only a strong business environment in comparison to other countries in the Mena (Middle East and North Africa) region, but also a buoyant project pipeline, according to BMI Research.
North African markets remain risky in comparison and are not investing in their infrastructure with similar vigour, it said in a recent report.
Qatar remains the stand-out market, recording the highest investment ratio within the GCC (Gulf Cooperation Council) and also having a strong operating environment.
In the region, Qatar’s is the highest investment ratio of 17.5, BMI said. Investment ratio is calculated by dividing total value of the construction project pipeline with total construction industry value.
While the investment ratio is a good indication of the level of growth and opportunity in a market, BMI notes that realising these opportunities for companies can often be troublesome.
In North Africa, political risk has been particularly elevated in the wake of the Arab uprisings, while the GCC markets are struggling with the sheer volume of work they are undertaking. Both insufficient institutional capacity and bottlenecks in the supply of labour and materials are causing delays to the implementation of work.
Along with Qatar, BMI has highlighted two major GCC markets - the UAE and Saudi Arabia in the report. The UAE in particular is a well-established favourite for international construction firms.
BMI is forecasting solid growth in the UAE construction sector in the run up to the Expo 2020 event.
While Saudi Arabia scores lower on the operational risk scores, once established in the market, companies will enjoy significant opportunities - with the market achieving an above average investment ratio and operational risk scores.
The GCC contains BMI’s favoured infrastructure markets across the Mena region.
“Not only are the GCC countries investing more in projects (in order to diversify their economies) than their North Africa counterparts, but they also offer a much stronger business environments for those operating on the ground,” the report said.
While activity in North Africa has been much more subdued as governments wrestle with restive populations and struggling economies, the GCC counties have stepped up their investment into infrastructure in recent years.
At the same time, the GCC construction industries have begun to regain ground lost during the financial crisis.
This has seen the value of the project pipelines across the GCC grow exponentially and leading to elevated real growth rates in construction industry values.



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