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Strategic Analysis of the Mechanical, Electrical and Plumbing Services Market in Middle East
Frost & Sullivan, Nov 2009, Pages: 113
Mechanical, Electrical and Plumbing is the most in-demand services within the construction sector in GCC. The market is highly fragmented with no mandatory regulations. The market has grown strongly over the last three years, although the growth for the next two years will certainly decelerate due to slow down in economy and reduced construction activity. The market is expected to witness a downward trend in 2009, 2010 and will further grow at a marginal growth rates till 2013. The growth of the MEP services market can be directly attributed to the growing demand in the construction sector, increasing awareness on energy and environment sustainability coupled with health and safety concerns.
This Frost & Sullivan research service titled Strategic Analysis of the Mechanical, Electrical and Plumbing Services Market in Middle East provides market dynamics, market size and forecasts, market profitability, as well as end-user and competitive analysis. In this research, Frost & Sullivan's expert analysts thoroughly examine the following service markets: mechanical services market application (heating, ventilation, air conditioning and refrigeration; fire fighting and fire suppression), electrical services market application (extra low voltage/low voltage systems; medium voltage systems), and plumbing services market application (water; drainage).
Market Overview
Growth of the Construction Sector Sets up the Market for Mechanical, Electrical, and Plumbing Services in the Middle East
The exponential growth of the Gulf Cooperation Council (GCC) construction sector is founded on the considerable cash reserves obtained from oil revenues over the last decade, following a surge in population, economic expansion, and subsequently, higher investments in real estate and infrastructure projects. This impressive growth of the construction industry bodes well for the mechanical, electrical, and plumbing (MEP) services market, since it is considered an integral service within the construction industry. The fragmented and highly competitive market is likely to take off in 2011, once the effects of the recent economic slowdown and reduced construction activities wear off and the economy rebounds. Nevertheless, Saudi Arabia, Qatar, and Abu Dhabi are expected to shore up the market for MEP services till 2013, as their economies are relatively insulated from the financial downturn, thanks to their surplus cash reserves and the latest stimulus package announced by the government.
“Moreover, improved awareness about energy and environment sustainability as well as public health and safety concerns are expected to go a long way in boosting the market for MEP services in the next five years,” says the analyst of this research. “Already the most in-demand service of the construction industry, MEP’s popularity will soar further with the strengthening of the GCC’s commercial, residential, hospitality, infrastructure, and educational sectors.” Meanwhile, the GCC has mandated all types of buildings to install technologies and services that will make them environment-friendly. Owing to such constant demand, contractors are continuously upgrading their services by investing in in-house pre-fabrication, design, and service capabilities to diminish the strong bargaining power of the end users. Such measures will involve dealing with the escalating costs of construction, construction commodity prices, and labor costs. These prices are not likely to decrease due to the steady global demand and rising accommodation costs of labor, which could severely constrict the contractor’s profit margins.
The market could also be adversely affected by the labor drain, as emerging economies are drawing laborers away from the region. In such a scenario, it has become vital for a company to recruit and send employees to training institutions to hone their skills, initiate training in-house, or provide on-the-job training. However, contractors can skirt the issue of manpower through technological developments, which will limit on-site prefabrication and thereby, lower time and manpower needs on site and boost productivity hours. Additionally, the involvement of design engineers in the early stages of construction and correct selection of materials will ensure proper building integration and sustainability by reducing its operating costs. “To gain a competitive edge, it is critical for MEPs contractor to offer scalable and comprehensive contracting service solutions at one-stop and back it up with effective qualified manpower for project design, installation, and service support,” notes the analyst.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Application:
Mechanical Services Market Application:
- Heating, ventilation, air conditioning and refrigeration
- Fire fighting and fire suppression
Electrical Services Market Application:
- Extra low voltage/low voltage systems
- Medium voltage systems
Plumbing Services Market Application:
- Water
- Drainage
By End Users:
- Commercial buildings (offices, retail)
- Residential buildings (apartment, palaces)
- Hospitality buildings (hotels/resorts, hospitals)
- Infrastructure (airports, seaports, railway stations, roads/highways/bridges)
- Educational buildings (universities/colleges, schools)
- Industrial buildings (factories, warehouses)
- Government buildings & others (ministries, military/defense and entertainment/leisure complexes, mosques)
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