BMI View: We have upwardly revised our construction industry forecasts for Iran on the back of the agreement reached with the P5+1 countries and the announcement that sanctions will be lifted faster than expected. S tructural weaknesses in the Iranian economy - particularly t he lack of competitiveness in the labour market - will present the main risks to investors willing to return to this market.
Key Trends And Developments
We forecast 1.4% y-o-y real construction industry growth in Iran in 2015 and an average of 4.3% over the next five years as a result of the lifting of international sanctions.
Greater competitiveness in Iran's labour market will be required to support growth in the construction industry. Although Iran's labour force is highly educated by regional standards, high labour costs will continue to pose a structural barrier to investment.
The steep fall in oil prices in the past few months has prompted our Oil & Gas team to revise down their already bearish price forecasts and they now forecast Brent to average USD59.0/bbl in 2015. With the oil and gas industry accounting for an estimated 70% of the country's total exports, the government has been forced to cut public spending in infrastructure.
With regards to economic growth, our Country Risk team forecasts Iran's economy to return to growth in 2015 with 0.6% real GDP growth. In the residential sector, we believe housing prices will remain elevated over the coming quarters, largely a result of a lack of appropriate housing units.
Apart from Chinese and Russian companies, Arab, French, Turkish, Indian and South Korean construction firms have expressed an interest in returning to the Iranian infrastructure market. The lifting of international sanctions will considerably diversify Iran's competitive landscape.
Despite an improving outlook for Iran's infrastructure sector, the country will continue to present significant challenges, including elevated political risk,...
The Iran Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Iran Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Iranian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Iran to test other views - a key input for successful budgetary and planning in the Iranian infrastructure market.
- Target business opportunities and risks in the Iranian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Iran.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.