Saudi Arabia is set to lead growth in Middle East’s infrastructure and construction spending over the next 15 years, a report compiled by BofA Merrill Lynch said on Tuesday.
The study noted that the construction sector across the Middle East and North Africa region will be a key beneficiary of governmental reforms to end their dependence on oil income and raise input of the non-oil sector.
“The MENA infrastructure and construction market is among the world’s most attractive given its sheer size,” the US bank’s report said.
The study predicted that a total of $4.3trn will be invested in construction projects across the MENA region by 2020, representing an increase of almost 80% from today’s spend.
“Due to many years of underinvestment, we expect Saudi Arabia to take the lead in terms of construction spending in the MENA region as the kingdom responds positively to pressing social needs such as labour, housing and education,” Philip Southwell, Bank of America Merrill Lynch president and country executive, Middle East and North Africa, said in the report.
The top American financial institution also noted that the region is expected to account for 12% of the global emerging markets and 4.4% of the world construction markets within the next decade with Saudi Arabia expected to continue leading the way.
“The construction and infrastructure sub-sectors in Saudi Arabia, however, remain strong, growing by 177% over the same period, and currently accounting for 46% of the 2012-2013 MENA project pipeline totalling $448bn,” said Mutashar Murshed, Merrill Lynch kingdom of Saudi Arabia CEO.
“With its young and expanding population, Saudi Arabia should remain the most buoyant market, in line with its overall economic development plan.”