Qatar will be among the fastest-growing construction markets globally over the next five years up to 2021, recording double-digit growth as the government work to tackle its “significant” infrastructure needs, a new report has shown.
Qatar’s construction market with a projected 12.1% growth between 2017 and 2021 will benefit from investment into preparations for the hosting of the FIFA World Cup 2022, BMI Research has said.
“Qatar's growth outperformance over the next five years will be driven primarily by substantial public investment into its transport and commercial construction building sectors as the market prepares to host the FIFA 2022 World Cup.
The government aims to spend QR198.4bn in 2017 and generate some QR170.1bn in revenue, opening a fiscal deficit of QR28.3bn that will be covered by issuing debt in the international financial markets.
Of this, 21% has been allocated to the transport sector, as the anticipated influx of visitors’ places strain on the existing network; and 47% for projects related to the hosting of the major sporting event, including stadia and ancillary infrastructure.
Opportunities for stemming from the event will ensure Qatar remains fertile ground for international investors, with an acceleration of tender announcements and contract opportunities expected in the run up to 2022.
“We are forecasting industry expansion of 12.1% in real terms between 2017 and 2021,” BMI said.
Besides Qatar, Myanmar, Ethiopia, Pakistan and the Philippines will be the fastest-growing construction markets globally over the next five years BMI said.
“The rapid expansion these markets will enjoy will be attractive to firms looking for new avenues of growth, offsetting the generally higher-than-average operational risk,” BMI said.
Construction opportunities in these markets (other than Qatar) are stemming primarily from the need to improve their overall logistics profile to support economic growth, it said.
Growth in these markets will be driven heavily by China's involvement, providing financing support and sector expertise as it looks to offset the slowdown in its domestic construction market by pursuing further opportunities internationally.
“Qatar is again the exception in this case, with public spending underpinning the progression of the market's packed project pipeline,” the Fitch Group company said.
Although these elevated growth levels to some degree represent growth from a low base – these construction markets are some of the smallest globally in nominal value terms – BMI has noted the high value of projects in the pipeline is also pivotal to their rapid expansion.