OPEC sticks to 2024 oil demand growth forecast

OPEC sticks to 2024 oil demand growth forecast
OPEC sticks to 2024 oil demand growth forecast

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Jeddah - Yasmine El Tohamy - RIYADH: Saudi Arabia has taken the lead in the Middle East and North Africa construction market, accounting for 67 percent of the total project value in the first half of 2023, according to JLL. 

In its latest construction market intelligence report, the global property consultant noted that the MENA region awarded projects worth $101 billion in the first six months of the year, with Saudi Arabia contributing around $44 billion.  

The UAE also played a significant role, with $23 billion in awarded projects. Both markets demonstrated growth compared to the same period the previous year. 

Laura Morgan, market intelligence lead for MEA at JLL, said: “While global interest rate hikes, high levels of inflation, and a sluggish trade recovery continued to impact the construction industry globally, the region stood out as an anomaly showcasing a sustained growth trajectory.” 

Although Egypt saw a decline in the value of awarded projects during the same period, the country has maintained a robust pipeline of upcoming projects. 

Saudi Arabia awarded $5 billion worth of projects in the residential sector and $2 billion in leisure projects.  

The report highlighted that “the combined estimated value of the project pipeline in the MENA region exceeded $3 trillion, with Egypt, KSA, and the UAE accounting for over 60 percent of this value.”  

The Kingdom holds the largest share, approximately 35 percent, with an estimated value of $1.3 trillion, while Egypt and the UAE each have an estimated value of $500 billion.  

“With an impressive project pipeline surpassing $3 trillion, led predominantly by nations like the UAE, Saudi Arabia, and Egypt, the construction sector promises more than just stability in the forthcoming period. It is slated to exhibit enduring growth, remaining the cornerstone of economic development and diversification in the MENA region,” said Morgan. 

Looking ahead, the report projected that Saudi Arabia’s construction market would experience a 4 percent annual average growth rate between 2024 and 2027, driven by the Vision 2030 plan. The UAE’s construction market is expected to grow by over 3 percent annually during the same period. 

Regarding tender price inflation, the UAE is forecasted to experience a 3 percent annual increase due to market factors linked to commodity and construction material price fluctuations.  

On the other hand, Saudi Arabia is expected to see an approximate 6 percent annual increase in 2023.  

The report noted that the UAE’s tender price inflation is anticipated to stabilize at approximately 2 percent in 2024  

This comes as Saudi Arabia’s inflation dropped to 2 percent in August, compared to 2.3 percent in July, driven by lower prices for furnishings, household equipment, and maintenance, according to the General Authority for Statistics.  

In another report published last month, property consultant Knight Frank highlighted that Saudi Arabia is on track to become one of the world’s largest construction hubs.  

As the Vision 2030 deadline draws nearer, Saudi Arabia's real estate projects, the largest on a global scale, are rapidly gaining momentum, stated Faisal Durrani, partner and head of research for the MENA at Knight Frank. 

This growth is further propelled by the substantial innovation happening within the Kingdom's construction sector. 

In a significant move, NEOM’s water and electricity subsidiary ENOWA successfully completed a trial in September using helicopters to install high-voltage transmission line towers, advancing its renewable-based energy system project.  

This innovative construction method reduces the carbon footprint by eliminating the need for heavy equipment, aligning with NEOM’s and the Kingdom’s commitment to sustainability.  

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