Further cuts to MENA construction sector expected for 2020

Further cuts to MENA construction sector expected for 2020

Posted in Construction, on July 5, 2020, Further cuts to MENA construction sector expected for 2020 as the region appearing to be hit with a triple whammy, per GlobalData, would sound in our opinion as a realistic assessment at this conjecture of the construction industry in the MENA.


The Middle East and North Africa (MENA) construction sector is expected to be bit by the triple whammy of lower oil production, low oil prices and contracting non-oil sectors. Leading data and analytics company GlobalData has further cut its construction output growth forecast for the region for 2020 to -2.4%, down from the previous forecast of 1.4%, in light of continued spread of COVID-19.

Yasmine Ghozzi, Economist at GlobalData, comments: “Construction activity for the remainder of 2020 is set to see poor performance. While there is usually weak construction activity in the holy month of Ramadan and during the hot summer months of June, July and August, this is usually compensated by strong performance at the beginning and end of the year. However, this will not be the case this year due to the strict lockdown policies that extended until the end of May.

“The sector is expected to face headwinds in 2021 with a slow recovery, but the pace of this will be uneven across countries in the region. Fiscal deficits and public debt levels will be substantially higher in 2021. Fiscal consolidation will hinder non-oil growth across the region, where governments still play a considerable role in spurring domestic demand.

“In addition, public investment is likely to be moderate, which will translate into fewer prospects for private sector businesses to grow – especially within sectors such as infrastructure. Expected increase in taxes, selected subsidy cuts and the introduction of several public sector service charges will influence households’ purchasing power, having a knock-on effect on future commercial investments.”

Amid the worsening situation with regards to the COVID-19 outbreak and the decline in oil prices, GlobalData has further cut its forecast for construction output growth in Saudi Arabia to -1.8% from its previous forecast of 2.9% in 2020 and expects a recovery in the sector of 3.3% in 2021. The government’s decision to host limited annual ten-day Hajj entails a possible loss of estimated revenue at more than US$10bn, adding more pressure on the Kingdom’s economy. 

Ghozzi adds: “GlobalData has estimated a contraction of 2.1% in construction output growth in the UAE but expects a rebound in 2021 of 3.1%. In one of the largest global energy infrastructure transactions, Abu Dhabi National Oil Company (ADNOC) raised US$10bn by leasing a 49% stake in its gas pipelines for 20 years. This landmark deal is important especially during the prevailing industry downturn in order to keep profitability.

“GlobalData has also cut further the growth rates for Qatar, Kuwait and Oman in 2020 to -3.4%, -7.8% and -8.1%, respectively. Qatar’s economy this year will be affected by decline in tourist arrivals, low consumer spending and low oil prices. Nevertheless, strong fiscal stimulus and spending on infrastructure projects should provide support.

“The negative outlook for Kuwait is weighed down by lower oil prices and the prospect of a higher fiscal deficit, possibly compromising the government’s capital spending on construction and infrastructure. Business unfriendliness constitutes a barrier to reforms in the Kuwaiti economy; the extensions in tenders’ deadlines compounded by an inflexible bureaucratic procurement setup that slows decision-making will delay progress for several Kuwaiti megaprojects.”

Egypt’s construction sector is set to continue performing well despite poor performance of the non-oil sector in April. GlobalData expects construction to grow at 7.7% in 2020, slowing from 9.5% in 2019, given a short-term slow down due to the pandemic and 8.9% in 2021, and to continue maintaining a positive trend throughout the forecast period. In the Arab Maghreb, GlobalData has further cut forecasts for construction growth in Tunisia, Morocco and Algeria to -3%, -2.1%, and -2.5%, respectively, in 2020 and 0.7%, 1.2% and 1.9%, respectively, in 2021.

GlobalData has a bleak view of Iran’s construction sector throughout the forecast period. A slowdown in economic activity caused by the virus outbreak and a possible wave of further US sanctions (in the event Trump wins a second term) will continue to wreak havoc on its economy, and drastically affecting construction activities.

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Construction industry updates from GlobalData

Construction industry updates from GlobalData

World Cementpublished by Emily Thomas, Editorial Assistant draws a picture of the MENA region related Construction industry updates from GlobalData.


GlobalData shares its forecasts for construction industries across the world in the midst of the coronavirus pandemic.

The revised and further-cut construction output growth forecast for the Middle East and North Africa (MENA) region for the year 2020 is -1.1%, down from the previous projection of -0.8% (as of mid-April) and 4.6% (Q4 2019 update) due to the soaring COVID-19 cases in the region, and the subsequent curfews and lockdown measures, according to GlobalData, a leading data and analytics company.

Yasmine Ghozzi, Economist at GlobalData, says: “The slump in oil prices will dent the sector’s growth. GlobalData expects cutbacks in spending and, in particular, cuts to capital spending on infrastructure, especially for oil and gas dependent countries given that investment plans were set on assumptions for oil at US$50 – US$80 per barrel. The IMF currently predicts that GDP growth in the MENA region will fall to – 3.3% in 2020 because of its exposure to lower oil prices and the extensive disruption in travel and tourism.”

Governments across the MENA region offered direct support to boost activity in construction and infrastructure. In the case of Egypt, for example, the government guided construction companies operating in public projects are set to resume work in full capacity by early April, following a period of two weeks of reduced business.

For Saudi Arabia, the biggest construction market in the region, the country’s finance minister announced plans to make deep cuts to public spending, so any further stimulus to the construction sector would rely on the amount of reserves the government is willing to draw upon, given the limit that lower oil prices have put on government revenues.

It remains to be seen whether governments in the region will lend direct support to companies facing acute financial pressure in the sector.

Ghozzi concludes: “In addition, construction, real estate, and oil and gas sectors are among the most exposed to the business risks created by COVID-19. Force majeure clauses in contracts are being more widely used by firms needing to scale back or rearrange their business plans amid the pandemic. The issue came under the spotlight when the Iraqi government announced the pandemic as an event of force majeure for all projects and contracts. Although construction sites are generally exempted from the lockdowns imposed in many countries in the MENA region, there is an expectation that legal claims, especially from contractors, will be filed citing the crisis as a justifiable reason for failure to deliver work on time.”

Construction industry updates from GlobalData

Our Duty towards Construction

Our Duty towards Construction

Shreya Chaudhari elaborated on our duty towards construction on in Construction Technology. At a time where it is wondered how fungi can help create a green construction industry, reflecting over our duty towards the construction of buildings cannot do wrong. So read on and find out about the well-founded reasons for doing so.

Construction is the well-known process for men of building houses with some unskilled labours. Thank you for reading the misconcepted sentence. Yes, It’s often seen with an eye of simplicity and frivolous job, which isn’t. We are in much of society’s mindset that a myth is more nurtured than a fact.

Call me old fashioned, but I believe there’s something to be said for doing good, honest work. Construction is sort of the unsung hero of our culture; vital to our infrastructure. Skilled tradesmen build the places we work in, the homes we live and play in, the roads we commute on, and more. Economy’s strength is tightly linked to the construction industry keeping country to move forward. A construction site is moreover different from a person sitting in front of laptop obeying a 9 to 5 cubicle job; it’s an area of daily new challenges to pass on to the next level. It requires a diversity of skills employing everyone deserving to choose as a career.

This is a technical journey of any structure or thoughts right from the foundation to finishing and external works. In building construction, we study how the civil works are carried out in the field after they have been planned by an architect and structurally designed by an engineer. A toddler whenever points his finger towards the swinging tower crane enjoying like the dance of a robot, it’s the duty of the project team to work successfully building block by block over heights.

As we are talking about the heights, so let me take you to the most heighted man-made structure! No required nominees, it’s Burj Khalifa, Dubai (or you can even argue with one of the most famous buildings because 830 metres is really a good number).

Our Duty towards Construction
Burj Khalifa, Dubai (source: internet)

Heard about World One? A structure finding it’s place to be the tallest residential skyscraper, yet under construction of Lodha group, Mumbai.

Our Duty towards Construction
World One, Mumbai (source: internet)

I’ve my stomach full with all these heights as you will mostly get in my next blog; until then let’s see some amazing constructions. The great man-made river project in Libya has listed as the biggest irrigation project in the world. Underneath of the Sahara Desert, it consists of 2800 pipes carrying 6.5 million cubic metres of freshwater every day.

Great man-made River, Libya (source: internet)

The most beautiful building in Jakarta, Regatta Hotel complex was designed by Atelier Enam. The project’s centrepiece is the aerodynamic hotel itself that overlooks the Java sea. Now wondered that struggle to be in top 10 beautiful buildings!

Our Duty towards Construction
Hotel Regatta, Jakarta (source: internet)

But, who knew that continuous endless building of structures would permit to cease for a no while. Because of the nature of his projects, all industries and companies are surged down to a force majeure. The workers are avoiding the work at construction sites due to fear of coronavirus infection. Threatening situations are discovered due to this pandemic endangering future of the construction world.

People are particularly trying to reach out finding alternatives as I mentioned in my previous blog (A virus outside the computer). Also, many cities have adopted a definition of essential construction that allows any work necessary to build, operate, maintain or manufacture essential infrastructure without limitation construction or the constructions required in response to this public health emergency, hospital constructions, etc.

According to the industry body, there are around 20,000 ongoing projects across the country and construction work is being undertaken in around 18,000 of them i.e. involvement of workforce of about 8.5 million in construction work alone! These numbers are breath-taking when health concerns. The scenario implies that the construction work will be slow, pushing costs upward given the interest and debt servicing needed for that extra period. Definitely it will have its own consequences but would be better far than doing nothing.
Hoping the same as everyone to defeat this monster, hiding myself from the fact that I’m bored writing about it  ; )

Global construction output growth revised to 0.5pc in 2020

Global construction output growth revised to 0.5pc in 2020

A leading data and analytics company GlobalData as reported by Trade Arabia on 4 April 2020, informs that Global construction output growth revised to 0.5pc in 2020. It must be said that it will be more acutely felt in the Gulf area of the MENA region with the Gulf economies to pick up this year following spending spree per a Reuters poll.


Global construction output growth revised to 0.5pc in 2020

Prior to the coronavirus (COVID-19) outbreak, leading data and analytics company GlobalData had predicted that there would be an acceleration in the pace of growth in the global construction industry, but given the severe disruption in China and other leading economies worldwide following the outbreak, the forecast for growth in 2020 has now been revised down to 0.5% (from 3.1 per cent previously). 

The current forecast assumes that the outbreak is contained across all major markets by the end of the second quarter, following which, conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year.  However, there will be a lingering and potentially heavy impact on private investment owing to the financial toll that was inflicted upon businesses and investors across a wide range of sectors, stated the top analytics company in its ‘Global Construction Outlook to 2024 – COVID-19 Impact’ report.  

While growth in 2021 will be marginally higher than previously expected owing to the projected rebound (and high year-on-year growth rate) in the first half of next year, in the event that the spread of the virus continues into the second half of 2020, further downward revisions to the growth outlook are likely, it added. 

Danny Richards, the lead economist at GlobalData, said:

“With extreme quarantine measures including lockdowns of entire countries as well as international travel restrictions being imposed across many major economies, the supply shock is expected to dampen economic activity.” 

“The direct impact on construction has been the halting of work with labour unable to get to sites or because of disruption in the delivery of key materials and equipment,” he noted. 

“More generally, the construction industry will be heavily affected by the expected widespread disruption to economic activity and a likely drop in investment, with planned projects being delayed or cancelled,” he added.  

GlobalData foresees particular struggles in the commercial and industrial sectors; businesses in these sectors are most at risk from the severe drop in economic activity, domestically and globally, and their immediate priorities will be on staying afloat and rebuilding their core operations, rather than expanding and investing in new premises or capacity.  

The residential sector also will struggle as economic activity weakens and unemployment rises, despite low-interest rates and direct government support, revealed Richards.  “There is a high risk that a considerable proportion of the early stage projects in these sectors will be cancelled or at least pushed back, with few new projects starting in the second quarter of 2020 as firms review their expansion plans,” he added. 

According to Richards, the governments and public authorities would likely be aiming to advance spending on infrastructure projects as soon as normality returns so as to reinvigorate the industry.  

“With interest rates falling to record lows, borrowing costs will be at a minimum, but the success of government efforts to spend heavily on infrastructure will be dependent in part on their current financial standing,” he explained.  

“Moreover, with most governments prioritizing cash hand-outs, particularly to the economically weaker segment, their capability to invest in the infrastructure segment is likely to be constrained, especially in countries with high debts,” he added.

-TradeArabia News Service 

How we can recycle more buildings

How we can recycle more buildings


The insatiable demand of the global building boom has unleashed an illegal market in sand. Gangs are now stealing pristine beaches to order and paradise islands are being dredged and sold to the construction industry was the introduction to an article of The Guardian. A less partial response to that would definitely that of Seyed Ghaffar, Brunel University London proposes here below to how we can recycle more buildings.


More than 35 billion tonnes of non-metallic minerals are extracted from the Earth every year. These materials mainly end up being used to build homes, schools, offices and hospitals. It’s a staggering amount of resources, and it’s only too likely to increase in the coming years as the global population continues to grow.

Thinking big. Shutterstock

Thankfully, the challenges of sustainable construction, industrial growth and the importance of resource efficiency are now clearly recognised by governments around the world and are now at the forefront of strategy and policy.

A critical component of the UK government’s sustainability strategy concerns the way in which construction and demolition waste – CDW, as we call it in the trade – is managed. CDW comes from the construction of buildings, civil infrastructure and their demolition and is one of the heaviest waste streams generated in the world – 35% of the world’s landfill is made up of CDW.

The EU’s Waste Framework Directive, which aims to recycle 70% of non-hazardous CDW by 2020, has encouraged the construction industry to process and reuse materials more sustainably. This directive, which favours preventive measures – for example, reducing their use in the first place – as the best approach to tackling waste, has been implemented in the UK since 2011. More specific to the construction industry, the Sustainable Construction Strategy also sets overall targets for diverting CDW from landfill.

Policies worldwide recognise that the construction sector needs to take immediate action to reduce greenhouse gas (GHG) emissions, tackle the climate crisis and limit resource depletion, with a focus on adopting a circular economy approach in construction to ensure the sustainable use of construction materials.


Read more: Circular economy: ancient populations pioneered the idea of recycling waste


Instead of simply knocking buildings down and sending the CDW to landfill, circular construction would turn building components that are at the end of their service life into resources for others, minimising waste.

It would change economic logic because it replaces production with sufficiency: reuse what you can, recycle what cannot be reused, repair what is broken, and re-manufacture what cannot be repaired. It will also help protect businesses against a shortage of resources and unstable prices, creating innovative business opportunities and efficient methods of producing and consuming.

Changing the mind-set

The mind-set of the industry needs to change towards the cleaner production of raw materials and better circular construction models. Technical issues – such as price, legal barriers and regulations – that stand in the way of the solutions being rolled out more widely must also be overcome through innovation.

Materials scientists, for example, are currently investigating and developing products that use processed CDW for manufacturing building components – for example, by crushing up CDW and using it to make new building materials.

Technical problems around the reuse of recycled materials should be solved through clever material formulations and detailed property investigations. For instance, the high water absorption rate in recycled aggregates causes durability problems in wall components. This is something that research must address.

Robots and AI should play a key role in future circular construction. Shutterstock

Moreover, it is illegal in the EU to use products that haven’t been certified for construction. This is one of the main obstacles standing in the way of the more widespread reuse of materials, particularly in a structural capacity. Testing the performance of materials for certification can be expensive, which adds to the cost of the material and may cancel out any savings made from reusing them.

For the construction, demolition and waste management industries to remain competitive in a global marketplace, they must continue to develop and implement supply chain innovations that improve efficiency and reduce energy, waste and resource use. To achieve this, substantial research into smart, mobile and integrated systems is necessary.

Radically advanced robotic artificial intelligence (AI) systems for sorting and processing CDW must also be developed. Many industries are facing an uncertain future and today’s technological limitations cannot be assumed to apply. The construction industry is likely to be significantly affected by the potential of transformative technologies such as AI, 3D printing, virtual/augmented reality and robotics. The application of such technologies presents both significant opportunities and challenges.

A model for the future

As the image below shows, we have developed a concept for an integrated, eco-friendly circular construction solution.

Author provided

Advanced sensors and AI that can detect quickly and determine accurately what can be used among CDW and efficient robotic sorting could aid circular construction by vastly improving the recycling of a wide range of materials. The focus should be on the smart dismantling of buildings and ways of optimising cost-effective processes.

The industry must also be inspired to highlight and prove the extraordinary potential of this new construction economy. We can drive this through a combination of creative design, focused academic research and applied technology, external industry engagement and flexible, responsive regulation.

Only through a combination of efforts can we start to recycle more buildings, but I’m confident that with the right will – and the right investment – we can start to massively reduce the amount of materials we pull from the ground each year and move towards a truly sustainable future.

Seyed Ghaffar, Associate Professor in Civil Engineering and Environmental Materials, Brunel University London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Conversation

Will future buildings manage and fix themselves?

Will future buildings manage and fix themselves?

Construction Week online‘s Anup Oommen on 27 November 2019, queries in the context of The Big 5: Will future buildings manage and fix themselves?


Aurecon’s Daniel Borszik shares insights on modular buildings “clipped together like Lego” and IoT-integrated buildings.


The building industry, which has historically lagged in terms of technology adoption, is beginning to have a dialogue on shifting from projects to products, with a particular focus on modular construction.

Speaking at the 40th edition of the region’s largest and most influential event for the construction industry The Big 5, Aurecon MEP associate, Daniel Borszik, said: “Modular construction could scale easily to an industry worth $100bn in the US and Europe alone. Even though that’s quite a large number, the industry could deliver about $20bn in annual savings.”

During his talk at The Big 5, Borszik shared details on the various methods of modular construction from modular 2D panels in high-quality single-family housing units that permit for design flexibility and optimised logistics; to 3D volumetric modular systems that create standardization, repeatability, and cost reduction in low- and mid-rise apartment buildings or hotels.

Borszik also elaborated on the combination of automated fabrication with what he called ‘buildable tech’, which called for new materials and fabrication methods that might initially attract a premium but will result in cost savings in the long run.

He pointed to a construction industry where future building parts are printed using cutting-edge 3D printing technology; where these building parts are then “clipped together like Lego”; where machine learning technology and Internet-of-Things (IoT) is integrated into these buildings; and where the completed buildings will be able to self-manage, and fix themselves.

“What I find exciting about the buildings of the future is that you will see a lot more of integration of technology in our buildings. Sooner or later, if the air conditioning has an issue in your house, the air conditioner itself will be able to send an email to the maintenance team to come and fix it, without the need for a human to raise a complaint, and all you get is a notification on your phone that maintenance has been scheduled,” Borszik said.

This will disrupt every player in the construction industry from developers, architects, and designers to contractors, subcontractors, suppliers, consultants and others. Borszik stated that all stakeholders in the industry need to prepare for the disrupting shifts in value pools.

“From engineers to designers, city planners to politicians, it will take all hands on deck to turn a truly transformative design into the city’s new normal,” Borszik concludes.

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