BMI View: Continued deficit spending in support of infrastructure projects and the solicitation of private capital will sustain the Sultanate ' s construction sector growth rally into 2017. Oman ' s construction fundamentals are increasingly bright - the government ' s focus on infrastructure investment as a means to facilitate economic diversification will ensure that contract opportunities remain plentiful in the years ahead, particularly in the industrial and commercial sectors, while growing structural demand in the country ' s water and power segments will continue to entice international investors. The country ' s proven ability to attract private investment by leveraging its PPP framework - among the more robust in the GCC region - will be a key advantage in blunting the effects of a prolonged period of low oil prices.
Forecasts And Latest Updates
We expect that Oman's 2016 recovery has further to run in 2017 and have accordingly revised our 2017 construction forecast upward to 10.1% from 7.4% to reflect an acceleration of project announcements in H216. Our five-year growth outlook is similarly sanguine, with the government's commitment to economic diversification and infrastructure investment informing our view that Oman's construction sector will expand by an annualised average of 10.6%.
Oman's government will invest roughly USD20bn in the modernisation and build-out of the country's transport infrastructure over the next 15 years, which underpins our view that transport is set to assume a greater long-term role in driving broader construction sector growth. We expect Oman's planned USD15.6bn national railway network will emerge as a key beneficiary of the government's investment initiative.
Robust demand for additional potable water in water-poor continues to attract investor interest, a trend we expect to persist in the coming years. Oman Power and Water Procurement Company (OPWP) have received bids from four consortiums for the USD272mn Salalah and Sharqiyah independent water projects in the country. OPWP revealed the consortiums are led by Japan's JGC Corporation, Spain-based GS Inima, Saudi-based ACWA Power and Spanish firm Tedagua.
|e/f = BMI estimate/forecast. Source: Central Bank of Oman, Ministry of National Economy, BMI|
|Construction industry value, OMRbn||2.07||2.26||2.52||2.85||3.27||3.76||4.21||4.63||5.14||5.74||6.34|
|Construction Industry Value, Real Growth, % y-o-y||-0.38||8.30||10.10||10.50||11.60||12.20||8.80||7.10||8.00||8.70||7.40|
|Construction Industry Value, % of GDP||7.3||7.8||8.5||9.2||10.0||10.9||11.7||12.2||12.9||13.8||14.5|
Oman vaults ahead of Saudi Arabia and into second place with a score of 68.1 in Q117, with a substantial improvement in the country's performance on the Industry Rewards pillar driving its recent overall score increase.
The Sultanate's significant improvement in its Industry Rewards score, which rose to 72.5 from 65, reflects our increasingly positive view of the country's construction sector growth potential in the coming years.
Oman performs particularly well in terms of Industry Risks due to a transparent and attractive competitive landscape that reduces threats to potential investors and tops the region with a score of 82.5.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Oman 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 Oman Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Omani infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Oman to test other views - a key input for successful budgetary and planning in the Omani infrastructure market.
- Target business opportunities and risks in the Omani infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Oman.
- 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.