GCC nations told to build on tough times
GCC nations told to spend way out of difficult period
Construction firms in the GCC are facing a tough year, according to a wide ranging survey carried out by business research firm MEED.
Ed James, Director of Content and Analysis, gave a bleak analysis when speaking at the MEED Leadership Summit in Dubai yesterday.
He told delegates that in the wake of plummeting oil and gas prices, the first quarter of 2016 has been the worst year for the GCC since 2005 and that it has been “pretty disastrous so far.”
In Saudi Arabia, the impact has been particularly hard with the Binladin group alone laying off 50,000 workers, something that James said was “the tip of the iceberg.”
James said that the UAE is the one country that is bucking the trend though by investing in projects to keep the economy ticking over in a difficult period.
He added the level of construction contracts awarded in Qatar has been hugely disappointing to industry experts, in the first quarter of 2016 they were awarded 1673 contracts. “They now actually have less than Bahrain (1705) and it has come almost to a complete stop,” he said.
He said the most important issue when it comes to the future prosperity of the market was “governments commitment to maintain spending in the face of falling revenues to keep the economy moving”.
He identified Expo 2020 and the Qatar World Cup as two examples of such projects that are allowing firms to stay in business.
He added that the biggest issues facing companies in the year would be cashflow and salaries.
DIG IN: Firms have been told of tough times ahead