Qatar construction set to tower above top markets

Qatar’s construction market is expected to outperform many developed economies by averaging a growth rate of 12.5% a year in this decade, a Commercialbank Capital report shows.In comparison, the construction market growth in the European countries will average just 1.7% to 2020, it said.The number of projects planned or underway in Qatar stood at $214bn in October 2011, Commercialbank Capital said.The value of projects has grown at a compound annual growth rate (CAGR) of 40% between 2005 and 2011, it said. And the value of projects under execution stands at $59.8bn with the transportation sector accounting for around 30% of the projects under execution. Within transportation, airport and roads have been the “main contributors” as they are witnessing a “substantial revamp” of new additions in facilities.As of October 2011, the total value of projects under execution in the country’s energy sector stood at $11.2bn, accounting for 19% of all the projects under execution in the country.This indicates the world’s leading supplier in the hydrocarbon sector has been “capitalising” on its core sector to meet the rising demand in the oil and gas sector. Furthermore, commercial and residential construction projects accounted for 21% of the total projects under execution.“Qatar’s ambitions and investment plans are different compared to other GCC countries,” Commercialbank Capital said. Qatar won the right to host the 2022 World Cup, which has imposed a time frame for completing the projects.The infrastructure the country will build over the next decade will also result in meeting the objectives of the National Development Plan. Preparing for the World Cup 2022 will drive spending on sports and transport infrastructure while the Qatar National Vision 2030 will focus on social infrastructure such as education, healthcare and culture. Qatar’s construction sector witnessed unprecedented growth between 2005 and 2008, growing at a CAGR of 46%.Sector productivity increased from QR8.7bn in 2005 to QR27.5bn in 2008. Following this, the construction market contracted in 2009 and 2010 on the back of the global crisis.Qatar’s construction sector, however, has not witnessed any major cancellations or projects on hold, unlike its regional peers including Dubai, Bahrain and Kuwait.The total value of projects put on hold or cancelled across the region stood at $460.3bn in October 2011.In Qatar, the projects put on hold were around 4% of the total market, compared to 59% in the UAE and 24% in Kuwait. The value of such projects in Qatar and Saudi Arabia was “insignificant” compared to the total size of the market. With Qatar slated to host a ‘zero carbon’ World Cup in 2022, Qatar Green Building Council has set up a group to foster green infrastructure as a national resource.Qatar is utilising Leadership in Energy and Environmental Design and the Qatar Sustainability Assessment System to this end.