Expo 2020 Impact on Gulf’s Building & Construction Sectorkwsmedeveloper
The construction sector of Gulf Cooperation Council (GCC) has entered 2018 with a positive frame of mind unfazed by the challenges of global economic condition. The major driver to the accelerated growth in Gulf’s building and construction sector is an upcoming event: Expo 2020 that will be hosted by Dubai in UAE starting from October 20, 2020 till April 10, 2021.
According to GCC Construction Analytics Report published by BNC Network; a key project research and intelligence provider in the Middle East and North Africa (Mena) region,
“The combined value of 22,680 active construction projects in GCC surged to Dh8.91 trillion ($2.43trillion) at the beginning of November, 2017.”
Total Number of projects in GCC and their value
|Urban construction sector||17,912||$1.21 trillion|
|Transport sector||1,423||$387.6 billion|
|Oil and gas||355||$337 billion|
The governments of GCC countries are trying to utilize their current oil resources to build a better future, aiming towards less dependence on oil and to achieve economic diversification and high standard of living.
This is why large amount of spending on these projects will keep sub-contractors and suppliers in business as well as create millions of jobs across the region thus ensuring strong economic growth.
Impact of World Expo on Dubai
Dubai’s economy and landscape has been largely impacted by upcoming world Expo. Being a host of the event, the emirate is the focal point of GCC’s construction sector. According to the “Expo 2020 Dubai – Infrastructure Development Report” issued by BNC Network,
“Dubai is driving large volume of construction activities with the total forecasted value of project investments for development of Expo site between USD 2 billion and USD 4 billion, and more than USD 8 billion is allocated for transport and infrastructure projects in and around the site.”
High valued construction projects
High valued construction projects in Dubai related to Expo 2020 include,
- Dubai Metro Red Line Extension (USD 2.9 billion)
- Expansion of Al-Maktoum International Airport- Phase II (USD 2 billion)
- Improvement of roads networks- Phase I to V (USD 390 million)
At the moment, Dubai has over 200 active transport projects with a combined projected value of USD 34 billion and most of the construction projects in Dubai will remain as permanent structures once the Expo is over.
Opportunities for Local and International Contractors
Construction & Real Estate activities along with technology inspired projects present numerous opportunities for local and international contractors. 25 million people are expected to attend the event raising the demand of housing and hotel rooms for tourists and businessmen alike. According to real estate analyst JLL,
“The residential property market – the most sophisticated in the Middle East and an established magnet for international investors, has about 78,000 individual units under construction and scheduled for completion by 2020. These will help meet demand for housing from a population forecast to grow at 3.5 per cent annually.”
Smart City Initiative
Dubai is known as a major international investment destination. The government is adopting best practices to be a global leader by creating a more robust and stable market. For this purpose, the government has introduced a Smart City Initiative whose objective is to build a smart and sustainable Dubai via infrastructure investments in transport, IT and energy management. This means for the construction sector; interior design, curtains, mechanical engineering and plumbing (MEP) and components will be made via 3-D printing.
Get more information on business opportunities and the procedure to start construction company in Dubai by going through article; construction business in Dubai in KWSME blog.
If you are looking to setup new business in Dubai or across UAE, get free consultation from our business representatives at Business Consultants Dubai. We provide complete company formation solution to our clients. Contact us to know more details.