Saudi Arabia's construction sector to grow 5.5% this year: Fitch
The GCC's construction sector is expected to outperform the Middle East and North Africa (MENA) region's average growth rate this year, Fitch Solutions said in a recent report.
Saudi Arabia and the UAE will grow below the regional average at 5.5 percent and 6.4 percent, respectively, but remain strong on a global comparison. The slow growth is partly because both countries have a well-developed infrastructure base and have already successfully implemented some economic diversification plans.
According to the report, the construction sector will be supported as the GCC countries plan to build large-scale developments such as $23 billion Riyadh Metro, $7 billion Dubai Expo 2020 Exhibition Centre and $6.4 billion Liwa Plastics Industries Complex in Oman.
"Government spending on infrastructure will continue to be a crucial factor supporting construction industry growth," the report said, revealing Oman, Egypt and Iraq to drive most of the region's construction activity this year.
Meanwhile, the construction sector in the MENA will grow at the fastest pace globally this year, as governments continue to invest in infrastructure projects and reconstruct conflict zones.
The Mena construction industry is predicted to grow on an average 7.5 percent year-on-year in 2019 and will expand at an average of 6.8 percent every year until 2022.
"Our bullish forecast is underpinned by strong government support for infrastructure development, expansive economic diversification plans, investment to improve logistics connectivity, and reconstruction efforts in conflict zones," the consultancy added.
Of the 16 regional countries tracked by Fitch Solutions, all are expected to see growth with the exception of Yemen, where it forecasts a 1.8 percent contraction as the country's four-year civil war precludes construction activity.