Dubai: The construction sector is certainly lining up to build their chances in Saudi Arabia. In fact, there is a “sharp” rise in positive vibes, according to a survey of the Gulf’s construction industry by Pinsent Masons, the law firm. A fairly high 29 per cent of respondents expect the kingdom to provide the most opportunity within the Gulf markets over the next 12 months compared to a marginal 11 per cent in 2016.
A blueprint for a top-down reform of Saudi Arabia’s economy is in the works, and the general consensus is that the construction and real estate development sectors will be major beneficiaries.
But when it comes to overall optimism, it is the UAE that the industry is comfortable with. It remains the number one market expected to deliver growth in 2018, with 38 per cent expecting the market to provide the “most opportunity over the next 12 months”.
Asked about which GCC country is the easiest to do business in, 89 per cent picked the UAE and Oman was in second place, at 46 per cent. Dubai had 71 per cent of respondents viewing it as the most appropriate location to solve regional disputes.
But it will be a while before the industry can turn expectations into results. A majority of the companies are involved in projects with a value of over Dh500 million. The findings show that 20 per cent expect their order books to decline by more than 10 per cent in the coming months compared to 16 per cent two years earlier. Asked about contract conditions, 86 per cent of businesses said they had become less favourable during 2017, representing a similar sentiment in 2016.
A significant number — 86 per cent — said payment periods were longer in 2017 compared to the same time last year. And 67 per cent stated they were involved in more disputes during 2017 than had been expected before the year started (as opposed to 59 per cent in 2015).
“Whilst analysts predict a slight economic revival across many GCC markets during 2018, the survey results are indicative of what has been a challenging time for the construction sector,” said Sachin Kerur, Head of Middle East Region at Pinsent Masons.
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