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Strong growth in Saudi construction predicted

Jadwa Investment sees strong growth in the Saudi construction sector from the Kingdom’s massive building plans but predicts a slowdown in the key export-driven petrochemicals industry as global growth weakens.
“It will be the theme of following government spending so I think building and construction, industrial investment and cement are areas that can not fail to benefit from the huge government investment and spending program,” Jadwa’s head of research Paul Gamble told the Reuters Middle East Investment Summit.
Saudi Arabia has pledged to spend an estimated $130 billion on housing and other social measures.
It is also spending $400 billion on infrastructure projects in the five years to 2013, making the construction and building sector among the most appealing in the country for Gamble over the next few years.
With a growing population of 27 million people, the country is currently facing a shortage in housing and will need around 1.65 million new homes by 2015, according to a report from Banque Saudi Fransi in March. “That will be there not just through 2012 but go on for probably the next five to six years. They, for us, are pretty attractive sectors,” Gamble said.
Gamble said he expected the petrochemical sector’s growth to come off because it was dependent on product prices holding up.
“Petrochemicals are slightly more difficult because they are driven by product prices.” – Agencies __