The beat goes on
ME PoV Summer 2015 issue
Despite lower oil prices, the forecast for construction projects awarded in the Gulf Cooperation Council (GCC) countries in 2015 is the highest on record. With construction generally considered as an economic barometer for the GCC, what does this tell us about the economic backdrop in the region?
According to MEED Projects magazine, the forecast for projects they expect to be awarded in the GCC in 2015 is US$172 billion, the highest on record. Total projects planned and underway for the GCC amount to US$2.8 trillion, with the majority of the spend being on residential, mixed-use, leisure and hospitality projects amounting to US$1.1 billion.
This is all against a backdrop of lower oil prices, continuing political unrest and reduced International Monetary Fund (IMF) growth forecasts across the GCC. It is also impacted by the deepening recession in Russia and, as reflected in the IMF World Economic Outlook update in February 2015, the projection for global growth in 2015 has been lowered to 3.5 percent, only a small increase from 2014. As per the IMF, the GCC export oil earnings are expected to decline by US$300 billion from the original estimate in October 2014.