Before the COVID-19 pandemic struck the global economy, Qatar was experiencing a thorough construction boom. The pandemic was responded to by terminations and postponed projects ranging from the 2022 FIFA World Cup to hospitality and residential constructions, shown through the GDP contraction of 5 percent in 2020.
Recovery of Qatar Construction Market
As the COVID-19 pandemic eases and rapid vaccinations are taking place, Qatar plans to continue its initial construction agenda strongly. The development for Qatar's 2022 FIFA World Cup has continued to emphasize the country's construction sector and push other related industries to grow.
Today, Qatar's construction industry stands as the largest non-mineral sector in the country, accounting for over 15 percent of its GDP. Moreover, FIFA World Cup 2022 is expected to bring more than one million tourists from across the globe to attend the event.
As a response, Qatar has launched 47 new hotels to facilitate the surge in demands. The mega construction for FIFA World Cup 2020 was made possible from the country's high budget surpluses in recent years alongside the increasing level of public spending.
The containment of the COVID-19 pandemic had also allowed infrastructure, hospitality, and residential projects to grow, pushing the economy into its pre-pandemic level.
The emphasis on residential projects owes its popularity to the rising urbanization in the country, resulting in thousands of new housing units under construction and expected to finish in the fourth quarter of 2021.
Mega Projects Continuation
Some megaprojects initially scheduled to take off in 2020 had also started their re-initiatives. The Lusail Stadium, which was previously aimed to be completed last year, is racing to finish in 2021. Qatar's mega projects are valued at around USD 34.5 billion.
As ongoing projects continue where they left off alongside the urbanization and 2022 FIFA World Cup, the Qatari construction sector expects to grow at a 19.1 percent growth rate this year.
Qatar's largest project client, the Qatari Diar, accounts for USD 17 Billion for its Lusail City development. Other notable projects are the extension of Hamad International Airport, Expressways, and road drainage projects contracted by the Public Works Authority (Ashghal) alongside the newly-launched Free Zone Authority.
The recovery of the Qatar construction market also pinpoints its success to the gradual rebound of global oil prices, as the country previously plans to massively expand its North Field project, the world's largest gas field aiming to go live in 2024.
However, looking at the pace of global oil price recovery, which has yet to position itself back to the pre-pandemic level, Qatar authorities have announced the project to start in 2025.
Nevertheless, Qatar's construction development remains resilient due to the shift in government spending as it seeks to diversify its economy.
The country's plan to become the regional leader in construction can be seen through its National Vision 2030 plan covering the government's plan to develop the manufacturing industry to detach its oil and gas sector income.
The country's construction sector is one of the fastest-growing industries, with massive investments from both public and private institutions.
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