Saudi Arabia's construction market is handling the economic downturn better than its neighbours in the Middle East, according to a report issued Sunday by Proleads Global, a research company.
Insights Saudi Arabia: An Investigation into the Current and Future State of the Civil Building Construction Industry looked at 720 projects worth more than $430 billion in commercial and retail; education and healthcare; leisure and entertainment; and residential sectors.
Unlike in the rest of the Middle East and the world, in Saudi Arabia construction cash flow grew during 2008 and stabilized in 2009. "The market in Saudi Arabia is expected to maintain current levels throughout 2010," said Emil Rademeyer, Director of Proleads Global. Saudi Arabia remains one of the most active construction markets in the world with more than 350 active projects in construction.
"The economic crisis has not had a great effect on the rate at which projects have been cancelled in Saudi Arabia," said Rademeyer. "Our cash flow projections show the Saudi Arabian industry will continue building from a position of strength well into 2010, whereas other Arabian Gulf markets continue to seek stability."
Fewer than 80 active projects worth around $20 billion were placed on hold or cancelled in Saudi Arabia. In the much smaller United Arab Emirates a study released by Proleads Global last week found 400 cancelled or on hold projects valued at $300 billion.
Other findings of the study are that residential projects have the biggest share in terms of value; "significant project completions" are due in 2011; market risk is restricted with 2 percent of projects making up 43 percent of total value.