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Kuwait Construction Market - Growth, Trends, COVID-19 Impact, and Forecast (2023-2028)

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  • 120 Pages
  • March 2023
  • Region: Kuwait
  • Mordor Intelligence
  • ID: 5332847
UP TO OFF until Dec 31st 2023
The size of the Kuwait Construction market is USD 13.2 Billion in the current year and is anticipated to register a CAGR of over 6% during the forecast period. The major factor driving the Kuwait Construction Market was Kuwait’s tax reforms encouraging foreign investors to invest in the country. They are giving benefits like income tax holidays and customs-free equipment importation. The country is hoping to attract more foreign investment.

Key Highlights

  • The country is trying to diversify its oil-rich economy. The government is focusing on increasing oil production to generate greater revenue, and an improvement in government finances will enable the government to increase public spending on infrastructure.
  • Industry growth is supported by government programs that encourage the development of transportation and renewable energy infrastructure. Kuwait's priority to accelerate economic reforms and diversify its economy away from hydrocarbon dependence will also support the construction industry.
  • With 5% of partnerships with the private sector in 2022, Kuwait has authorized more than USD 60 billion for infrastructure, health, environment, and energy projects. The projects include four partnership projects valued at nearly USD 3.2 billion and 14 significant public projects with a combined value of almost USD 59 billion.
  • According to a government report cited by the Arabic language daily Alqabas, 12 big housing projects totaling nearly 10.2 billion (USD 33.66 billion) will receive the majority of the allocations. A total of 10 oil projects worth 5.8 billion dinars (USD 19 billion) and a handful of development projects worth 7 billion dinars (USD 23 billion) are also included in the plan.
  • Additionally, to meet the demand of a rising population, the government is investing substantially in infrastructural projects related to electricity and water. A majority of the projects are being developed by the government through Public Private Participation (PPP) or by inviting foreign companies to provide engineering, design, and construction capabilities.

Kuwait Construction Market Trends

Vision 2035 to drive the investments in the construction sector

The sustainable living environment axis in Kuwait Vision 2035 includes five pillars, the most prominent of which is to provide housing care to citizens through what is planned to ensure the provision of 65.5 thousand housing units through five projects costing about KWD 3.22 billion (USD 10.5 billion), the last of which ends by 2029.

When these projects are implemented, the state will have met approximately 72% of the current housing requests, which stands at 91,000. The first project of the residential care plan revolves around the vision of Kuwait 2035 (New Kuwait) in the city of Jaber Al-Ahmad, which has a completion rate of 95% and will end at the end of 2022. The second project is in the city of Al-Mutla’a, with a completion rate of 64%, to be completed by the end of 2023.

The third project is in the suburb of South Abdullah Al-Mubarak, which has a completion rate of 72% and will be completed by the end of 2025. The completion rate in the fourth project, which is the South Sabah Al-Ahmad, is about 14%, as it is still in the preparation stage, and it is expected to be completed in 2029. This south of Saad Al-Abdullah has a completion rate of 13% as it is still in its preparatory phase and ends in 2029.

Investments in Large-scale Projects to the boost the Construction Sector

Kuwait’s infrastructure sector is a leading sector. The country’s development plan (2020-2025) focuses on economic reform and implementation of numerous long-stalled megaprojects, with several large infrastructure projects estimated at USD 124 billion. It includes a number of infrastructure upgrades such as the USD 7 billion Kuwait City Metro, a rail project that will eventually link all GCC countries, a USD 4 billion new airport, five new planned cities, including Silk City/Northern Economic Zone, further development of the Mubarak Al-Kabeer Port on Boubyan Island, and a large number of mega oil projects, including a new refinery that is still under construction. The government is working on over USD 4 billion worth of hospital projects as part of its plan to boost the bed capacity of hospitals across the country.

Project implementation has seen frequent delays, especially with large infrastructure projects. The government itself acknowledged that only 10 projects out of 135 projects included in the 2015-2020 five-year development plan were completed. With 81 projects delayed and four projects yet to be tendered, those projects were included in the five years development plan (2020-2025).

Despite the challenges such as cost overruns, and bureaucratic delays, the market is expetced to witness robust growth given the strong infrastructural, government, and policy support.

Kuwait Construction Market Competitor Analysis

The Kuwait construction market is highly competitive, with major international players. The market presents opportunities for growth during the forecast period, which is expected to drive market competition further. With a few players holding a significant share, the Kuwait construction market has an observable level of consolidation. Some major players include Hyundai Engineering and Construction, Marafie Group, Consolidated Contracting Company, SK Engineering & Construction, and M.A.Kharafi and Sons, amongst others.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

Table of Contents

1.1 Scope of the Market
1.2 Market Definition
1.3 Executive Summary
2.1 Study Deliverables
2.2 Study Assumptions
2.3 Analysis Methodology
2.4 Research Phases
4.1 Current Economic and Construction Market Scenario
4.2 Technological Innovations in the Construction Sector
4.3 Impact of Government Regulations and Initiatives on the Industry
4.4 Mapping of Industrial Clusters and SEZs and a Brief Analysis of Investment Opportunity
4.5 Review and Commentary on the Extent of Kuwait's Economic Diversification
4.6 Comparison of Key Industry Metrics of Kuwait with Other GCC Member Countries (Analyst View)
4.7 Comparison of Construction Cost Metrics of Kuwait with Other GCC Member Countries (Analyst View)
4.8 Impact of COVID-19 on the Market
4.9 Market Dynamics
4.9.1 Drivers
4.9.2 Restraints
4.9.3 Opportunities
4.10 Industry Attractiveness- Porter's Five Forces Analysis
4.10.1 Bargaining Power of Suppliers
4.10.2 Bargaining Power of Consumers/Buyers
4.10.3 Threat of New Entrants
4.10.4 Threat of Substitute Products
4.10.5 Intensity of Competitive Rivalry
4.11 Industry Value Chain Analysis
5.1 By Sector
5.1.1 Commercial Construction
5.1.2 Residential Construction
5.1.3 Industrial Construction
5.1.4 Infrastructure (Transportation Construction)
5.1.5 Energy and Utilities Construction
6.1 Market Concentration Overview
6.2 Strategies Adopted by Major Players
6.3 Company Profiles
6.3.1 JGC Corp.
6.3.2 SNC-Lavalin
6.3.3 Fluor Corp.
6.3.4 Van Oord Dredging & Marine Contractors BV
6.3.5 VINCI
6.3.6 Marafie Group
6.3.7 Combined Group Contracting Co.
6.3.8 Mohammed Abdulmohsin Al-Kharafi & Sons
6.3.9 Hyundai Engineering & Construction Co. Ltd
6.3.10 Kuwait Contracting and Processing Co. (KCPC)
6.3.11 Mushrif Trading & Contracting Co.
6.3.12 Kharafi Group
6.3.13 Gulf Dredging
6.3.14 Sayed Hameed Behbehani & Sons*
8.1 Existing Infrastructure
8.2 Ongoing Projects
8.3 Upcoming Projects

Companies Mentioned

A selection of companies mentioned in this report includes:

  • JGC Corp.
  • SNC-Lavalin
  • Fluor Corp.
  • Van Oord Dredging & Marine Contractors BV
  • Marafie Group
  • Combined Group Contracting Co.
  • Mohammed Abdulmohsin Al-Kharafi & Sons
  • Hyundai Engineering & Construction Co. Ltd
  • Kuwait Contracting and Processing Co. (KCPC)
  • Mushrif Trading & Contracting Co.
  • Kharafi Group
  • Gulf Dredging
  • Sayed Hameed Behbehani & Sons