Infrastructure Lays Foundations For Residential/Non-Residential Growth
BMI View: In the final release of our new Qatar construction industry data, we reveal that it is the residential and non-residential building sector which will be the major driver of growth over the long-term. Leveraging off improved infrastructure and the World Cup in 2022, developers are building major residential projects and the social infrastructure to go with them. Coupled with the hotels and stadia being prepared for the World Cup, we see strong annual average real growth of 12.7% over our forecast period from 2014 to 2023. We note that while growth will pick up in the run up to 2022, as with other emerging economies which hold major sporting events, growth will take a hit in the aftermath of the World Cup, although Qatar's Vision 2030 should keep growth positive.
Qatar's residential and commercial construction segments are going to be among the clear long-term outperformers in the country's construction sector, bolstered by the Vision 2030 and, over our forecast period, World Cup projects. It is also going to be buttressed by a business environment that has drawn all the major engineering, services, banking and real estate players from the Middle East and beyond to the market. As such, we believe that fundamentals for growth in the sub-sector remain strong, but as we have previously highlighted in our analysis, there are risks of bottlenecks in the supply of building materials and labour, especially as infrastructure projects are likely to take precedent for government financial assistance.
There are two clear phases developing in Qatar's residential and non-residential construction sector growth trajectory:
Residential/Non-residential To Outperform Residential and Non-Residential Building Industry Value (QARbn) and Real Growth (% Change y-o-y)