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Despite a surge in material costs due to the higher oil prices, growth in construction output continued to accelerate in the MEA region in the first quarter 2022, according to a report by the real estate services provider JLL on Tuesday.
In the latest quarterly Market Intelligence Update for the region, JLL said over 2022–2030, construction output is forecast to grow at an annual average growth rate of 2.3 percent.
Gary Tracey, Head of Cost Management, Project & Development Services, MEA, said last year economic uncertainty stemming from the COVID-19 pandemic global construction output rose by over 4 percent.
"In the MEA region, this trend has continued into 2022, driven by government vision programmes and a busy projects market, with the forecast 2022 tender price indices for KSA and the UAE at 6-8 percent and 4-6 percent respectively.”
The momentum comes despite the increase in material prices caused by several factors including rising oil and metal prices. "Prices in the near-term are likely to be impacted by the geo-political situation, inflation and supply & demand side factors," it added.
Of the key markets in the region, Egypt is likely to be more susceptible to increasing material prices, due to the requirement from Egypt’s Central Bank for letters of credit to be issued for the import of goods, the report added.
In Egypt, price of materials will be further affected by currency fluctuations as following the devaluation of the Egyptian pound, it noted.
(Writing by Brinda Darasha; editing by Seban Scaria)
