New Construction market report from Business Monitor International: "Qatar Infrastructure Report Q4 2013"
Boston, MA -- (SBWIRE) -- 10/25/2013 -- Despite continued concerns about long lead-times for many of the planned projects across the country and the potential for rising costs of labour and materials, we maintain our overall bullish outlook for Qatar's construction sector. A strong commitment to public spending coupled with the most attractive and stable business environment in the region will help Qatar in achieving its ambitious infrastructure development targets to facilitate the 2022 FIFA World Cup and its own 2030 Vision. For investors, these factors will position Qatar as a safe haven for regional investors, as highlighted in our Risk/Reward Ratings table.
BMI's Country Risk team believe that Qatar's economic growth will remain underpinned by the nonhydrocarbons sector over the coming quarters, with robust household consumption and construction activity making up for an ongoing stabilisation in hydrocarbons production. Fiscal policy is set to remain strongly supportive of the economy: the government has signalled its intention to ratchet up both current spending and investment expenditure over FY2013/14 (fiscal year running from April to March).
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Off the back of this robust economic performance, the construction industry in 2012 performed better than expected and has informed our decision to upgrade our outlook for the sector in 2013 and 2014. We now forecast that the construction sector will grow in real terms by 10.2% in 2013 and 10.1% in 2014.
Key factors informing this improved outlook for Qatar's infrastructure industry include:
- US$29bn in contracts expected to be awarded in the second half of the year, which would put this year's combined value of contracts at $56bn, (more than double the value of contracts awarded in 2012).
- Ahead of the 2022 FIFA World Cup, and in line with the country's 2030 Vision development plan, Qatar's spending on infrastructure is expected to reach around US$150bn over the next decade. A series of infrastructure projects are in the pipeline, including: a US$1bn transport corridor project in Doha; a US $20bn investment in roads; US$40bn to be invested in railways; US$15.5bn to be spent on a new airport; US$4bn to be invested in stadiums; US$8bn to be spent on a deep-water seaport; tens of thousands of hotel rooms to be built; and even a new city.
- For 2013, the Qatari government has initiated a major infrastructure upgrade of the road network in the country, which as we expected has begun to result in a sharp increase in contracts being awarded. For example, construction supervision contracts for the US$4.1bn Doha Expressway were awarded in April and for the US$5bn Doha Bay Crossing in May. The country is believed to have one of the busiest road markets in GCC to date, with contacts awarded so far being valued in excess of US$1.8bn.
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