Boston, MA -- (SBWIRE) -- 12/31/2013 -- As work continues in preparation for the 2022 World Cup and as Qatar's US$150bn infrastructure programme is implemented, we are seeing strong growth rates in the country's construction industry. We maintain our forecasts for real construction industry growth of 10.2% in 2013 and 10.1% in 2014. However, the market has been under pressure on a number of fronts, with rising price inflation caused by materials shortages, and worker safety featuring in the world's media. As such, we note that growth may be constrained over the medium term. Constraints in the market are also likely to decrease profit margins owing to continuously rising construction costs.

BMI's Country Risk team believes Qatari economic activity will continue to expand at a strong pace throughout 2014, driven primarily by growth in the non-oil sector. Robust private consumption on the back of a fast-growing population, large government spending commitments, and continued progress on infrastructure projects by public enterprises will support growth over the coming quarters. We have raised our real GDP projections on the back of positive data and now forecast growth of 5.4% in 2014. 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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In line with the expectation for robust economic performance, we are maintaining our construction forecasts this quarter. GDP data reveal that Qatar's construction sector grew by 11.4% year-on-year in real terms in Q213.

Key factors informing our outlook for Qatar's infrastructure industry include:

- US$29bn in contracts expected to be awarded in the second half of 2013, which would put 2013's combined value of contracts at US$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; 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.
- The Qatar 2022 Supreme Committee is planning to issue tenders for the Al Wakrah stadium in Q114, which will host the 2022 football World Cup games, according to the committee's secretary general, Hassan Al Thawadi. Once the enabling works contract is tendered, the committee is expected to issue the main contract for the stadium in Q414.

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