Iran Infrastructure Report Q4 2014 - New Market Report

From: Fast Market Research, Inc.
Published: Wed Sep 17 2014

We forecast that real growth in the Iranian construction industry will pick up momentum in the short- to medium term, with growth forecast to average 4.2% over the next five years. While this is highly dependent on the outcome from negotiations with the West over the nuclear programme, the market is already showing signs of recovery and interest from international firms is on the rise.

The Islamic Republic remains a country of pronounced risks, including political instability, economic challenges and social tensions, and we believe the current situation is unsustainable in the long term. Despite elevated oil prices, US energy sanctions and the EU oil embargo have affected Iranian oil production and consequently the economy at large. With the oil and gas industry accounting for an estimated 70% of the country's total exports, the government has been forced to cut public spending, with a devastating impact on infrastructure development.

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Key Trends And Developments

* Although we estimate construction industry growth to have been as low as 0.5% in 2013, we expect the industry to pick up momentum in the short- to medium term, growing at an average rate of 4.2% over the next five years.
* A 'permanent' agreement between the P5+1 countries and Iran on the Islamic Republic's nuclear programme will not be reached in 2014. Significant technical and political challenges remain, but we expect nuclear talks will continue through 2015.
* Our Country Risk team forecasts real GDP growth of 3.2% and 2.7% in 2014 and 2015 respectively, from a 2.9% contraction in 2013. The return to growth will be the result of improving relations with the West, more effective macroeconomic management and low base effects.
* In the residential sector, we believe that housing prices will remain relatively elevated over the coming quarters, largely a result of a lack of appropriate housing units. Although we are confident that the current administration will succeed in encouraging...

The Iran Infrastructure Report features Business Monitor International (BMI)'s market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.

BMI's Iran Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Iranian infrastructure and construction industry.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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