New Construction research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 01/20/2015 -- We forecast that up to 2018, real growth in Bahrain's construction industry will average 3.6% , buoyed by government investment in infrastructure and social housing. While this is an improved outlook on a year ago, there is no end in sight to Bahrain's protracted political crisis and we see little chance of a rapid construction industry recovery. Persistent political uncertainty will likely see private sector investment into new projects remain weak when there are more attractive opportunities elsewhere in the Gulf region .
Key developments in the sector:
- According to the government, Bahrain is due to launch infrastructure projects worth USD4.4bn in the coming years, financed out of a USD10bn 10-year fund pledged by the Gulf Cooperation Council (GCC) for the country in 2011. USD2.2bn will be allocated to housing construction over 2015-17, while the remaining half will be channelled towards the water and power sectors.
- Our Country Risk team believe that the country will not regain its former status as the region's leading financial centre. Bahrain's historical position as the regional hub for Islamic finance is already under threat from Dubai, which announced in 2013 that it would seek to become the global capital of the Islamic economy. In conventional banking, Abu Dhabi, Qatar and Saudi Arabia are gradually eroding the status of Dubai and Bahrain. As a major driver of real estate investment in Manama, the failure of Bahrain to regain its status will drag on demand for major new office space and high-end residential building.
- In light of subdued private sector activity, investment will remain primarily government-driven and is likely to focus predominantly around a number of large-scale industrial projects, including the USD4.8bn expansion and modernisation of state-run Bahrain Petroleum's refinery; a new USD2.2bn production line at Aluminium Bahrain; a USD1.2bn expansion by Gulf Petrochemical Industries; and plans to expand...
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