October 12, 2008

Gulf construction feels heat of supply shortages – Report

Khaleej Times reported that Gulf’s booming construction industry is feeling the heat of soaring materials costs and labor shortages amid concern that supply pressures could delay the completion of projects.

Mr Sheikha Lubna al Qassemi economy minister of UAE has warned that supply constraints might slow construction in the area. He added that “Regional and international factors that could unexpectedly cause a recession in construction should be watched. Among the critical factors were knowing the limit in terms of the availability of building materials and labor force.”

Construction in the Gulf has been hit by increased worldwide demand for building materials, as construction fever spreads to countries such as China. The Gulf region has experienced its own building frenzy over the past few years on the back of record-high crude oil prices, which are pumping huge liquidity into the economies of GCC countries.

Research firm Proleads in November 2007 quoted that the value of Gulf construction projects at USD 2.4 trillion. It added that this would rise to USD 2.5 trillion, if projects currently only at planning stages were included. But this building boom in GCC member states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE has put extra pressure on the supply and cost of construction materials and labor force.