WHILE the GCC construction industry remains positive about 2015 with 77 per cent of respondents to a survey stating they were optimistic, their confidence levels have fallen by 13 per cent from last year, a report said.
The drop in positivity may partly be explained by ongoing geopolitical concerns, the fall in oil prices, a highly competitive market with a softening in the level of increased order books, and the cost of accessible capital, according to the annual GCC Construction Survey conducted by international law firm Pinsent Masons. The survey indicated that 33 per cent of respondents were expecting an upswing in their order books of 10 per cent or more, which compares to over 40 per cent in 2013 expecting that level of growth.
The tempering in optimism may also be related to the industry’s more measured view about the positive impact Expo 2020, which Dubai will host, will have on the sector. Less than 10 per cent of respondents thought that the World Expo projects between 2014-2016 would provide a dramatic upswing for construction companies, compared to 26 per cent of firms in 2013, who believed the Expo would provide a boost between 2016-2020.
Saudi Arabia (40 per cent) followed by the UAE (33 per cent) and Qatar (14 per cent) are expected to be the strongest performing construction markets in the Middle East and North Africa (Mena) region this year, according to those surveyed.
Transport (69 per cent) followed by real estate (48 per cent) and power (46 per cent) were considered to be the strongest sectors in terms of opportunities for the year ahead.
Sachin Kerur, managing partner, Gulf Region at Pinsent Masons, said: “These results offer an insight into how the GCC construction market is shaping up for the year ahead. Optimism clearly remains high, but there is a marked cooling compared to 2013 when the Expo fever was at its height.”