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As the American and European economies continue to take a battering in these turbulent financial times, it becomes essential for the MEP industry in the Middle East to take stock and examine its options.
Keeping this in mind, MEP Middle East asked Frost and Sullivan to prepare a research report that examines the state of the sector in the GCC, and how the effects of economic expansion, burgeoning population growth and an increasing environmental awareness are helping to contribute towards the growth of the regional MEP industry.
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With research carried out by Building Technologies Practices, a subdivision of Frost and Sullivan, the report has led to a number of interesting conclusions being made about where the GCC is headed in terms of MEP.
One of the first things that the researchers noticed was how rising international trade and the resulting increase in the number of business and international travellers has resulted in significant investments in housing, hotels, hospitals, shopping malls and offices, thereby facilitating growth in construction activities.
“MEP services, in recent times have evolved from a conventional service to an integrated service delivery pattern that encompasses services ranging from designing, procuring, supplying, installing, integrating, testing and commissioning, as well as operation and maintenance in order to execute safer, comfortable and environmentally friendly operations for a modern building,” an analyst from Building Technologies Practices says, declining to be identified due to the research company’s policy.
In addition, Frost and Sullivan found that the increased demand for electrical services in the building and infrastructure sector has contributed to around 40% to 45% of the market. At the same time, mechanical services accounted for 35% to 40% and plumbing services around 20%.
Future Outlook:
Early this year, Frost and Sullivan predicted that the Middle Eastern MEP market would be worth approximately $22.44bn by 2013, nearly double their 2008 valuation of $13.53bn.
Leading this surge in growth are the countries of Saudi Arabia, Qatar and the UAE, who will have approximately 89% of the market share in the near future. This is expected to help provide huge growth opportunities in the near future, the research firm said. It added that the remaining 11% of the market would be made up of the rest of the GCC, including Kuwait, Oman and Bahrain.
“The GCC market for contracting services is highly fragmented and competitive. The market participants include various international, regional and local companies. The market has emerged and is mainly driven by the contractors that have more bargaining power in the value chain,” the analyst added.
Until 2008, figures showed that the UAE was the leading market for MEP services, but gradually, Saudi Arabia started contributing to increased opportunities and market revenues, spurred on by a rapid increase in its construction activities.
“The Saudi Arabian market has been a sleeping giant that is now waking,” says Kevin Mitchell, the UAE director of Buro Happold.
Since its inception, the UK owned engineering consultant has worked on a number of MEP related projects in Middle East, with some projects dating back as far as 1976, when it worked on the Central Government Complex in Riyadh, Saudi Arabia.
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FEATURED COMMENT
This article contains conclusions that will not take the industry forward. "In conclusion, the analysts predict the next