Commercial Construction Creates Upside To Forecast
Significant investment in Oman's commercial construction segment presents upside to our industry forecast. The country's burgeoning tourism sector remains one of the key areas of economic growth, with developers showing strong interest in luxury hotels and resorts. In addition, Oman has significant potential to gain a bigger share of the MICE industry (meetings, incentives, conferencing, exhibitions) with its new US$1.5bn Convention and Exhibition Centre, which is now under construction. Developing both the tourism and the MICE industry will allow the country to diversify its economy away from reliance on oil export revenues while supporting construction and infrastructure industry growth.
After fairly volatile growth in the last decade, we currently forecast stable annual average industry growth of 5.2% between 2014 and 2022. If construction projects continue to be tendered and secure financing, we may upwardly revise our forecast in the coming months.
Two key projects have been awarded to Carillion, the British construction firm that continues to expand its operations in Oman. The first contract involves package two of the Oman Convention and Exhibition Centre. This US$176mn contract includes the construction of a car park for 4,200 vehicles, 22,000 square meters (sq m) of exhibition halls, an energy centre and an electrical substation, a waste management building, a security screening facility and other auxiliary infrastructure. Construction of package two is expected to take twenty months - with the Convention Centre's deadline for completion in 2016.
|Construction Industry Value (OMRbn) And Real Growth %|