Having contracted for three successive years up to 2019, the construction industry in Oman shrank further in 2020, having been hit hard by the impact of the Coronavirus (COVID-19) pandemic, low oil prices, production cuts owing to the Organization of the Petroleum Exporting Countries (OPEC) guidelines and sovereign credit rating downgrades. The industry contracted by 12.2% last year, and is expected to remain weak in 2021, declining by 0.5% in real terms. In the short term, the industry’s output will be supported by investments on the construction and repair of infrastructure in response to the damages caused by Cyclone Shaheen, which hit parts of the country in early October 2021. However, the recovery will be slow in the coming years, so much so that output will not return to 2019 levels until 2024.
The improvement in output from the lows of 2020 will be supported by investments in the construction of oil, electricity, transport and housing infrastructure projects. In January 2021, the government launched the 10th Five-Year Development Plan (2021-2025), with an aim to diversify the economy and reduce reliance on oil revenue. The plan is expected to create 135,000 job opportunities over the next five years. Some of the main targets of the plan include increasing the contribution of the transformative industries to the total GDP from 10.8% in 2020 to 12.2% to 2025, as well as the transportation and logistics sector from 6.4% to 7.5% and the education sector from 4.9% to 6.2% during the same period.
Rising Foreign Direct Investment (FDI) will also support the industry’s recovery. According to the NCSI, the total value of FDI rose by 4.6% in the first half of 2021, to reach OMR31.9 billion (US$83 billion). Of the total, the oil and gas sector attracted investments worth OMR21.3 billion (US$55.4 billion), while the manufacturing sector attracted investments worth OMR2.9 billion (US$7.6 billion) during the same period.
A downside risk to the industry’s output could arise from the government’s plan to cut public spending to control fiscal deficit. Public sector spending cuts are the government’s priority in 2021, continuing throughout the medium term (2022-2024), as outlined in the Medium-Term Fiscal Plan (MTFP). The fiscal plan is intended to reduce public debt, increase the state’s reserves and diversify revenue away from oil. In the 2021 Budget, the government decreased its total spending by 17.4%, going from OMR13.2 billion (US$34.3 billion) in the 2020 Budget to OMR10.9 billion (US$28.3 billion) in the 2021 Budget.
The improvement in output from the lows of 2020 will be supported by investments in the construction of oil, electricity, transport and housing infrastructure projects. In January 2021, the government launched the 10th Five-Year Development Plan (2021-2025), with an aim to diversify the economy and reduce reliance on oil revenue. The plan is expected to create 135,000 job opportunities over the next five years. Some of the main targets of the plan include increasing the contribution of the transformative industries to the total GDP from 10.8% in 2020 to 12.2% to 2025, as well as the transportation and logistics sector from 6.4% to 7.5% and the education sector from 4.9% to 6.2% during the same period.
Rising Foreign Direct Investment (FDI) will also support the industry’s recovery. According to the NCSI, the total value of FDI rose by 4.6% in the first half of 2021, to reach OMR31.9 billion (US$83 billion). Of the total, the oil and gas sector attracted investments worth OMR21.3 billion (US$55.4 billion), while the manufacturing sector attracted investments worth OMR2.9 billion (US$7.6 billion) during the same period.
A downside risk to the industry’s output could arise from the government’s plan to cut public spending to control fiscal deficit. Public sector spending cuts are the government’s priority in 2021, continuing throughout the medium term (2022-2024), as outlined in the Medium-Term Fiscal Plan (MTFP). The fiscal plan is intended to reduce public debt, increase the state’s reserves and diversify revenue away from oil. In the 2021 Budget, the government decreased its total spending by 17.4%, going from OMR13.2 billion (US$34.3 billion) in the 2020 Budget to OMR10.9 billion (US$28.3 billion) in the 2021 Budget.
The publisher’s Construction in Oman - Key Trends and Opportunities to 2025 report provides detailed market analysis, information and insights into the Omani construction industry, including:
- The Omani construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Omani construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Scope
This report provides a comprehensive analysis of the construction industry in Oman. It provides:
- Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Oman, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using the publisher's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using the publisher's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.
Table of Contents
1 Executive Summary2 Construction Industry: At-a-Glance6 Construction Market Data
3 Context
4 Construction Outlook
5 Key Industry Participants
7 Appendix
List of Tables
List of Figures
