KUWAIT has signed contracts worth $17.5 billion this year, with a number of large-scale projects already under way and at the development stage, according to a report from the Oxford Business Group.
Citing figures from business consultancy Ventures Middle East, the report said that the value of contracts in the pipeline for the year represents more than a 50 per cent increase on $11.75 billion worth of contracts awarded last year.
However, raw material supplies, including cement, are in short supply and could cause delays and cost increases, it said.
Project values have nearly doubled over the past two years as Kuwait pushes on with infrastructure and housing development, awarding contracts at a pace that outstrips the regional average, said the report.
“The UAE, along with Saudi Arabia and Qatar, are the top three markets for the construction sector in 2014,” Saleh Muradweij, managing director at Drake & Scull Construction, was quoted as saying.
While Kuwait has set out its long-term programme for infrastructure and economic development, there are concerns it will struggle to keep to the planned time-frame.
The report said that Kuwait’s construction industry will have to contend with strong regional demand for cement and potential price rises, citing analysis from industry publication Cement World, which said that regional demand for this and other building materials will surge as a result of increased infrastructure spending.
On the macro-economic front, supply shortages could increase inflationary pressure – directly through rising materials costs and indirectly should blockages in the supply pipeline slow the delivery of projects, in particular in the residential component of the industry where the private sector is more active, the report added.