Oman Construction Industry’s Value Add at Present Prices Rose by 4.0%

Date: 2015-09-17

“• According to Oman’s National Centre for Statistics and Information (NCSI), the construction industry’s value add at present prices rose by 4.0%, from OMR341.3 million (US$887.6 million) in the first quarter of 2013 to OMR355.1 million (US$923.6 million) in the first quarter of 2014. The total traded value of property in the country grew by 43.2% from OMR680.6 million (US$1.8 billion) during the first five months of 2013 to OMR974.7 million (US$2.5 billion) in the first five months of 2014. This growth was driven by government investments to improve the quality of Oman’s infrastructure and efforts to diversify its economy. The forecast-period outlook for construction in Oman remains positive due to improving consumer and investor confidence, population growth, urbanization, and improved regional and global economic conditions. Large-scale investments in infrastructure development, through government initiatives to transform the country from an oil-based economy to one more reliant on manufacturing and services, will be an important driver of growth.

• According to the NCSI, the total number of planned land plots by governorates of Oman grew by 5.0% from 61,101 in 2012 to 64,154 in 2013. The total number of planned land plots for residential construction rose by 0.4%, from 49,845 in 2012 to 50,045 in 2013, while the total number of planned land plots for both commercial and residential construction grew by 30.5% from 2,469 to 3,223. In addition, the total number of land plots granted by governorates for both commercial and residential construction rose from 402 in 2011 to 1,562 in 2013. This reflects healthy growth in the construction of new houses.

• Under the eighth five-year (2011–2015) development plan, the government is focusing on infrastructure development to support economic growth and improve transport facilities. The government plans to invest OMR1.2 billion (US$3.2 billion) by 2015 in the construction, repair and maintenance of roads and bridges across the country. The government also plans to invest OMR502.0 million (US$1.3 billion) in the construction, expansion and development of ports in the country during the same period. Consequently, large-scale investments in transport infrastructure development will drive growth in the infrastructure construction market over the forecast period.

• A robust and modern transport infrastructure is vital for economic growth and competitiveness. The Omani government is therefore undertaking a railway network project with an expected investment of OMR5.8 billion (US$15.0 billion) to construct 2,244km of rail line by 2018 which will connect the Sohar, Salalah and Duqm port cities with other Gulf Cooperation Council (GCC) countries. This will drive growth in the infrastructure construction market over the forecast period.

• According to the World Travel and Tourism Council (WTTC), the travel and tourism sector’s total contribution to the country’s GDP stood at 6.4% in 2013, and the Omani government is keen to support the sector’s expansion. With the aim of increasing tourist arrivals from 1.4 million in 2011 to 12.0 million annually by 2020, the government announced the ‘Vision 2020’ plan for tourism and plans to invest OMR3.1 billion (US$8.0 billion) in tourism-related infrastructure development across the country. This will help support growth in the leisure and hospitality buildings category over the forecast period.

• In a bid to create more jobs and diversify and support the country’s economy, the Omani government is developing the Salalah Free Zone, the country’s first special economic zone. The Salalah Free Zone is expected to be developed in three phases by 2028, at an estimated investment of OMR5.8 billion (US$15.0 billion), which will support growth in the industrial construction market over the forecast period.”

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