Infrastructure Spending In The Middle East Set To Rise – Survey

There is renewed optimism in the Middle East regarding spending in the construction sector, thanks to mega projects such as the Qatar FIFA 2022 World Cup and Expo 2020 in Dubai, according to a survey.

The Middle East capital infrastructure survey by PwC, whose respondents included the region’s developers, contractors and project owners, found that 75 per cent expect an increase in funding for infrastructure and capital projects over the next 12 months. The UAE, Qatar and Saudi are seen as their top target for investment due to the strong economic growth and budget surpluses of these countries.

However, despite the positive outlook, results of the survey also revealed many challenges that exist in the sector, one of them being an expected ‘capacity crunch’ as market capacity is not keeping pace with demand.

Capacity constraints are beginning to impact project delivery as the survey found that 95 per cent of respondents saw a delay in projects, with 45 per cent of them saying their projects were delayed by more than six months. Decision-making was also a challenge, as 35 per cent of contractors found it the greatest obstacle they face.

“Broadly speaking, these problems have been apparent in our region’s infrastructure sector for several years, but the increase in activity is making them more acute. They need to be urgently addressed if the region is to deliver on its ambitions,” said Stephen Anderson, PwC’s leader of Capital Projects and Infrastructure in the Middle East.

In addition, the survey also revealed that project owners and contractors found it challenging to find the right skilled people to manage their projects, and that funding is also an issue. “There simply isn’t enough funding available,” added Anderson.

The PwC survey asked respondents for their views on the challenges they faced in 2013 and early 2014, and their outlook for the coming 12 months.