JEDDAH – Saudi Arabia is predicted to lead growth in the Middle East and North African (MENA) region's infrastructure and construction spending over the next 15 years, a new medium term outlook BofA Merrill Lynch Global Research Report “GCC 2020: Time to Shift Gears” said. The infrastructure and construction market in the MENA region is among the worlds' most attractive due to its size, it noted. A total of $4.3 trillion will be invested in construction projects across the MENA region by 2020, an increase of 80 percent compared with current figures. Saudi Arabia is expected to take the lead in regional infrastructure spending and construction projects as it responds positively to pressing social needs such as labor, housing and education. “Due to many years of underinvestment, we expect Saudi Arabia to take the lead in terms of construction spending in the MENA region as the Kingdom responds positively to pressing social needs such as labor, housing and education,” said Philip Southwell, Bank of America Merrill Lynch president and country executive, Middle East and North Africa. The recent approval of the mortgage law will help drive growth in residential construction in response to the current housing shortage. “The construction and infrastructure sub-sectors in Saudi Arabia, however, remain strong, growing by 177 percent over the same period, and currently accounting for 46 percent of the 2012-2013 MENA project pipeline totaling $448 billion,” said Mutashar Murshed, Merrill Lynch Kingdom of Saudi Arabia CEO. “With its young and expanding population, Saudi Arabia should remain the most buoyant market, in line with its overall economic development plan,” the report said. The MENA region is expected to account for 12 percent of global emerging markets and 4.4 percent of world construction markets within the next decade. Saudi Arabia is expected to continue to lead the way. Meanwhile, the Middle East steel industry started off on a positive note from the beginning of this year with demand for the metal picking up as industry experts project 15 percent growth on the back of rising requirements from the UAE, Saudi Arabia and Qatar. The UAE industrial sector expanded by nearly 11 percent in 2011 while in Saudi Arabia, $384 billion plan for infrastructure and industrial projects has been announced. According to a recent research report, demand for steel products have surged immensely over the past few years, backed by construction boom, growth in the real estate investment and rising income level. The apparent consumption of finished steel products is expected to reach more than eight million metric tons by 2014 end. With the reduction in import tariff by the GCC, imports of steel are expected to increase in the years to come. A top official of Sharjah Chamber of Commerce and Industry said the industrial capital of the UAE expects to achieve up to 5 percent industrial growth in 2012 compared to last year. The emirate's manufacturing sector contributes more than 35 per cent of the country's total production. Last year Sharjah achieved AED21 billion industrial productions, so it's expected to achieve AED22.1 billion productions. Hussain Mohammed Al Mahmoudi, DG of SCCI, said on the basis of GDP forecast, “we can target 3 percent to 5 percent increase in industrial growth this year. To make it very conservative let's say three percent.” – SG/Agencies
