Boston, MA -- (SBWIRE) -- 07/23/2012 -- Government policy reforms to reduce economic restrictions in the industrial sector drove demand for infrastructure development. In addition to this, rising population levels and increasing tourism also added to the demand for infrastructure development. Additionally, the authorization of private participation in real estate development and efforts to encourage foreign property investment in the region fuelled growth in the residential construction market. However, the construction industry suffered a decline in 2009, following the global economic crisis and the tightening liquidity situation, which caused a significant decline in oil prices. The industry registered a slight recovery in 2010 due to huge public expenditure and rising oil prices.
Infrastructure construction represents the largest and fastest-growing market within the GCC construction industry. As a part of their economic diversification efforts, the GCC nations invested heavily in upgrading and developing transport infrastructure, since efficient logistic systems were identified as key for industrial growth. GCC governments also invested in energy and communications infrastructure to sustain economic growth and develop a strong services sector. Furthermore, economic growth led to an increase in demand for the provision of drinking water, which was scarce in the region due to a lack of natural resources. Furthermore, development of infrastructure facilities in existing urban areas and the development of new cities in underdeveloped areas of the region is also fueling growth in power, road, rail, communications and water infrastructure.
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- During the review period, commercial construction was the second fastest growing market and recorded growth, which was attributed to the influx of numerous foreign retailers and businesses.
- The industrial construction market in the GCC recorded growth during the review period. Growth in the industrial construction market is being driven by the economic diversification efforts undertaken by all the GCC member nations.
- The infrastructure construction market represented the largest segment in the GCC construction industry in 2010. The growth in this segment was attributed to significant government expenditure on improving power, road, rail, communications and water infrastructure.
- The growth in institutional construction was driven by investments in educational and healthcare facilities by the GCC governments, to sustain economic growth.
- The residential construction was the smallest market in the GCC construction industry. In order to encourage growth in the residential construction market, regional governments introduced stimulus packages which included housing projects targeting low- and medium-income households.
- This report provides a comprehensive analysis of the construction industry in the GCC:
Companies Mentioned in this Report: Arabtec Holding PJSC, Dar Al Arkan Real Estate Development Company, Galfar Engineering & Contracting SAOG, Kharafi National, The Nass Group, Panceltica Holdings Ltd
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