Business | Economy
Gulf attracting world's largest contractors
The massive infrastructure growth in the Gulf is attracting world's largest contractors, according to the Middle East Business Intelligence Contractors Survey 2007, conducted by the Middle East Economic Digest. It said contracts worth $193 billion were awarded last year.
- By Nadia Saleem, Staff Reporter
- Published: 23:41 February 5, 2008
- Image Credit:
- According to the survey, an estimated $884 billion worth of projects are in the planning or tendering stage in the region currently.
Dubai: The massive infrastructure growth in the Gulf is attracting world's largest contractors, according to the Middle East Business Intelligence Contractors Survey 2007, conducted by the Middle East Economic Digest. It said contracts worth $193 billion were awarded last year.
Currently, an estimated $884 billion worth of projects are in the planning or tendering stage in the region, the survey said.
A lag in the construction industry in Europe and North America, coupled with the Gulf's economic boom, is resulting in the region increasingly becoming a hub for international contractors.
A rise in contracts comes along with deficient resources. The immense shortage of labour in Dubai will result in increase in costs of projects, industry experts say.
Wages are expected to increase by 20 per cent. Material costs are also climbing. Last year saw a 70 per cent increase in price of steel, and a 50 per cent increase in price of cement, the survey said. Contractors in the region are expecting profits margins to grow in double figures.
"The profit margins are increasing, but not at the rate that we had forecast, due to the increase in prices of building materials and accommodation. We are trying to improve our standards," said JR Gangaramani, chairman of Al Fara'a Contracting Group.
"According to MEED Projects, $193 billion worth of construction is under way across the Gulf, and as the MEED contractor survey shows, those with a strong regional presence are reaping the rewards," said Richard Thompson, editor of MEED.
"The majority of contractors surveyed this year are taking on more work in 2007 than in the previous 12 months," Thompson added.
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