A maturing GCC construction sector is no bad thing

As the Middle East’s construction sector enters adolescence and time-honoured doors begin to close, the smartest industry players are focusing on the windows that are opening

COMMENT, Business, Construction, GCC region, Middle east

Perhaps it’s an after-effect of my tenure as PMV editor, but I still find it interesting to compare the construction equipment preferences of Europe and the Middle East. By and large, the former remains fond of compact models that can operate within confined work sites. The latter, meanwhile, retains a penchant for heavyweight earthmovers that can level large swathes of terrain.

A similar analogy can be drawn between the regions’ project pipelines. Whilst many parts of the Middle East are investing in brand new infrastructure initiatives, the infra-related work taking place in Europe tends to involve maintenance, refurbishment, or replacement.

I am now going to engage in a monstrous oversimplification that completely ignores the geographical and geological differences that exist between the two regions. Nevertheless, space is limited and (perhaps more importantly) it supports my argument. So here goes.

The aforementioned machinery- and project-related variations can be explained as follows: Europe has built, whereas the Middle East is building. Compact machinery, for instance, is useful in Europe because it can work around existing structures. The Middle East, on the other hand, still has the capacity to build outwards, so larger kit remains in vogue.

That said, it doesn’t take a genius to see that just as Europe was not always built, the Middle East will not always be building. The so-called ‘iconic’ projects of yesteryear are becoming fewer and farther between in GCC countries. The region’s construction industry appears to be entering that awkward stage of adolescence; no longer an infant, but not yet fully grown.

In the shorter term, this represents somewhat of a challenge for Gulf construction firms, as tried-and-tested revenue streams begin to run dry. But instead of fighting exclusively over these sectors, the smartest players are turning their attentions to the battlegrounds of tomorrow.

Take for example Daousser Chennoufi, chairman and key architect at Draw Link Group. In this week’s issue, he discusses retrofitting – an increasingly lucrative endeavour in the GCC (page 24). This segment may be relatively small at present, but as one that is dependent on the ageing process of buildings, market maturity will no doubt drive its growth.

The same logic can be applied to a diverse selection of other construction-related fields: demolition, recycling, waste management, smart technologies, renewables – the list goes on. In isolation, such disciplines are not yet sufficient to support large-scale enterprises in the Middle East, but early adopters will reap rewards in the longer term.

For my part, I’m thinking of investing in a compact excavator on a buy-to-let basis. Mark my words, it won’t be long before they’re all the rage.

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Construction Week - Issue 767
Sep 01, 2020