USD 156 billion worth of projects were awarded during 2021 across the MENA region in the construction and digital transformation sector driving growth in the region’s real estate sector.
This according to JLL’s MENA Construction Economic and Cost Insight Review, which stated that construction activity maintained its momentum into 2021, with USD156 billion worth of projects awarded over the year across the region.
“The Egypt, KSA and UAE announcements of their planned 2022 government spending is also expected to be a catalyst for growth. The report also identifies new trends over the past two years and a shift in societal behaviours could lead to future development opportunities,” according to a statement by JLL.
The report revealed that the Kingdom of Saudi Arabia recorded the highest value of awarded projects at USD 41.3 billion. While Egypt, UAE and KSA was the busiest countries in the region when it came to the residential sector.
“We believe the pandemic has prompted a change in mindset and envisage clients and developers alike will look for a change in their project processes, which in turn will lead to new or revived strategies to promote project success,” said Gary Tracey, Head of Cost Management-Project & Development Services, JLL MENA.
“We also expect market sentiment will continue to improve as commodity prices stabilise over the course of 2022.”
Key takeaways from the MENA Construction Economic and Cost Insight Review:
According to JLL, the continuation of business and leisure activities to pre-pandemic levels will continue to encourage economic growth within the region. Egypt’s headline Purchasing Managers Index (PMI)1 increased to 49.0 in December. The UAE’s PMI for November reached 55.9 - the highest reading since June 2019.
KSA represented the highest value of awarded projects for 2021 with a recorded USD 41.3bn. The residential sector was consistently the busiest market across Egypt, KSA and UAE. The total infrastructure awards in 2021 for Egypt was USD 6.9bn, while KSA infrastructure totalled USD 3bn and USD973m for the UAE.
According to JLL, throughout 2020 and 2021 metal prices were susceptible to volatile changes within the market triggering prominent price increases. This was closely linked to global demand and logistic constraints caused by the pandemic. Increasing transportation costs from higher fuel prices also impacted material costs in the region.
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