Sultanate’s Economic Diversification Plan (Vision 2040) has been a Key Growth Factor in the Construction Sector
The Sultanate of Oman is the third largest country in the Arabian Peninsula. The construction industry is the second major sector that contributes to Oman’s economy. The construction industry accounts for a 9% share of Oman’s GDP and is the country’s largest employer.
The factors driving the growth of the market are the Sultanate’s strong economic diversification plans, which include developing and diversifying the economy and releasing its potential for growth, with the ultimate goal of promoting development and competitiveness through increased government spending on key non-oil sectors and stimulating private investments.
In lines with Oman’s Vision 2040, the sectoral growth will drive investment in infrastructure, commercial, residential projects and energy infrastructure. Under Oman’s 2040 Industrial Strategy, the government has marked industrialization, diversification and privatization as growth opportunities; benefitting the construction industry.
Oman’s new Five-Year Development Plan (2021-2025) attaches great importance to construction development by ensuring optimum utilization of resources and investment opportunities in the various governorates in the Sultanate.
Tourism is Expected to Drive the Commercial Construction Sector in Oman
ln alignment with Oman Vision 2040 and the Tenth Five-Year Plan, tourism has been identified in the plan as a key sector to achieve economic diversification in the Sultanate, promote growth, increase the GDP’s non-oil revenues and attract direct foreign investments.
Oman’s tourism and construction markets are opening up additional opportunities for business, partnerships and investment. With the government’s allocation of higher budgets for capital expenditure projects in the tourism and real estate sectors under its 10th Five-Year Economic Development Plan, commercial and residential projects are stimulating demand.
The positive outlook for the GCC construction industry is reinforced by a sustained rally in oil and gas prices that started in late 2020 and has continued into 2022.
EIU expects Brent oil to trade in a range of US$90-110 per barrel for the remainder of 2022 and average prices will remain elevated at about US$85-95 per barrel in 2023-2024.
Domestic and foreign contractors, consultants and suppliers are expected to benefit from a buoyant construction sector and ample opportunities to participate in lucrative GCC contracts from 2022 and through to 2026.