(MENAFN- Muscat Daily) A multibillion-dollar cash injection from the state is supporting new growth across Oman's construction sector amid efforts to encourage the industry to source labour services and supplies locally to broaden the contribution to its economy according to the Oxford Business Group's Oman report.
Oman which accounted for about six per cent of construction and infrastructure projects among the GCC countries as of April 2014 has US$150bn worth of programmes planned or underway according to MEED. Oman awarded contracts worth US$6bn-US$8bn over the past seven years - making it one of the most stable markets in the region - with the value of spending expected to increase thanks to major projects planned over the next five years.
According to the sultanate's current five-year economic development plan running from 2011 to 2015 the government has earmarked around RO2.5bn a year to develop infrastructure. Priorities of the investment programme include alleviating pressure on Muscat's ports and airports and improving connectivity with the rest of the region. Transport is the primary focus of construction investment accounting for 66 per cent of the total.
The government announced in October 2013 that the country will spend more than US$50bn in infrastructure projects over the next 15 years. From this budget US$20bn is earmarked for the transport sector including Oman National Railway.
Investments have been growing incrementally over the past few years thanks to increasing oil revenues. Indeed the construction sector performed strongly during the past five years outpacing the overall economy by notching up average annual growth of 5.5 per cent according to data from the Oman Society of Contractors. The industry accounted for five per cent of GDP in 2013.
A robust pipeline particularly in the transport infrastructure sector and investment associated with a burgeoning tourism industry will provide growth of 6.4 per cent in 2014 Business Monitor International estimates while will average out at 5.4 per cent over the next five years.
Not only is the scale of construction activity set to rise over the coming year the scope of building development is also set to expand according to Youssef Shammas managing partner of Target an Oman-based contractor.
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