With growth downgraded last quarter, Saudi Arabia's infrastructure and construction sectors have now settled into a period of lower growth. Strategically important infrastructure projects will continue to be awarded and projects currently under way are unlikely to be halted. Less important projects such as secondary cities' metro projects and renewable energy development are likely to be where most efficiency gains with regards to spending cuts are made over 2016 and beyond.
Latest Updates And Structural Trends
The drop in oil prices will drag on growth in the residential and non-residential sector, which has had a knock-on effect on our construction industry forecasts for 2016. Over 2016 we now see real growth in the construction sector of 6.5% y-o-y.
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Our expectations for a rationalisation of fiscal expenditure has started to play out, although we note = politically important areas such as housing and social infrastructure remain largely untouched.
With many of the major projects under development being awarded over the past four years - the majority of which will be completed by 2018, the latter half of our 10-year forecast period will see the residential and non-residential sector overtake infrastructure as the main driver of growth.
Risk/Reward Index:
Despite our growth revision, Saudi Arabia's RRI score has remained stable this quarter at 71.3 out of 100, placing it above the MENA regional average.
Saudi Arabia has the largest construction market in the GCC and scores highly for the amount of investment made in the economy. The labour market is the biggest risk in the construction sector.
Saudi Arabia's reliance on oil exports and its intervention in Yemen has exposed the country to growing risks, lowering scores in this sector of the RRI.
The Saudi Arabia Infrastructure Report features BMI Research'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 Saudi Arabia Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Saudi infrastructure and construction industry.
Key Benefits
Benchmark BMI's independent infrastructure industry forecasts for Saudi Arabia to test other views - a key input for successful budgetary and planning in the Saudi infrastructure market.
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Report Published: "Saudi Arabia Infrastructure Report Q2 2016"
Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001