Gulf's construction sector needs an oil price push, says Danube chief
This will allow governments to reactivate spending on much needed infratsructure
Dubai: The construction sector in the Gulf countries will “continue to thrive” despite the temporary thaw caused by COVID-19 crisis.
“It would be fair to say that construction sector will revert to normal when the oil price surge above $50 per barrel (from $40 levels,” said Rizwan Sajan, Chairman of Danube Group. “This drop in oil prices can be ascribed to the world being under partial lockdown. So, the prices per barrel would soon go higher than $50 once economy of each country is reinstated.”
When that happens, the governments will have to invest in infrastructure – highways, utilities, soft infrastructure to help the new families grow.
As long as oil price remains above the breakeven level of $50, the construction sector will benefit as the governments will continue to build infrastructure and expand housing, according to the Danube chief.
“The macro-economic fundamentals will continue to remain strong for the GCC,” Sajan added. “The current situation is a temporary hiccup – in the larger scheme of things – and should be seen likewise.”