The Middle East construction sector will have to change in response to the economic turmoil which has plagued the global construction industry since 2008 but still remains an attractive market.
The first ever technical conference at Big 5 2010 started yesterday and discussed what form the new construction sector in the Middle East would take and how mistakes made even before the financial crisis must be learnt and rectified in order for the construction sector to come out of the recession.
Despite the negative impact of the global recession on the region?s construction market, the Middle East continues to be an attractive region for the global construction industry and will be a place to increase business and start new business according to the technical conference chairman, Stephen Oehme, consultant and regional director of Hyder Consulting.
Mr Oehme discussed how the landscape for business in the Middle East is going to change as the market moves out of the recession slowly. He put the construction market in the region in context and discussed the ?phenomenal market? with the UAE alone having 1,300 projects worth US$418 billion under construction and 300 projects worth US$143 billion at the design and bidding stage. This situation presents significant opportunities for businessess wanting to get into the construction industry.
This sentiment was further supported in the conference?s first session with Husein Odeh, General Manager of Turner International, which focused on the ?Outlook for the construction market coming out of a recession.???
Mr Odeh pointed out that although there were signs of recovery happening it was only at a very slow rate. He said that: ?The cost of construction is back to where it should be, which is a good indicator for the recovery of the industry.? You have to go back to fundamentals; you have to have a solid business plan, which many developers did not have during the boom period.? If you invest in the quality of the building it will pay off in the long term.?
He highlighted the important lessons that the industry has learnt as a result of the recent recession, most importantly that planning is key: ?Anyone with money thought he could be a developer, so did not think to put a team together.? Buildings were created out of nothing and the developers did not have the credibility. Market demands were not addressed, long term goals were not clear.?
Although Mr Odeh could not predict exactly where the industry was in regards of projected growth he showed that the GCC?s economy is looking strong again, with an expected GDP increase of between two and five per cent in the coming year, with markets such as the UAE and Kuwait, which dropped into negative GDP during the recession, increasing to around four per cent.