Oman’s constriction sector is expected to rebound in 2022, and is projected to register growth of 3.3%, a new business intelligence report released by HTF MI revealed.
According to HTF MI, the construction industry is projected to expand by an annual average rate of 4% over the remainder of the forecast period (2023-2025).
“The government’s programs to promote the development of affordable housing, transport and renewable energy infrastructure are expected to continue to support the expansion of the industry in the coming years,” the report said.
“Looking further ahead, while Oman continues to enhance its oil recovery techniques to boost oil production, it will keep pursuing its diversification plan ‘Vision 2040’, and construction will continue to be a major contributor to growth in Oman’s non-oil GDP, offering solid prospects for economic diversification,” the report stated.
HTF MI considers the prospects for capital expenditure projects in the tourism and manufacturing sectors as being key to the construction industry’s recovery; “these sectors have been recognized as long-term drivers of revenue diversification and economic growth for the Sultanate.”
In January 2022, the government launched the 10th five-year development plan 2022-2025, with an aim to diversify the economy and reduce reliance on oil revenue. Under this, the government plans to increase the contribution of transformative industries in the country’s total GDP from 10.8% in 2022 to 12.2% in 2025, the transportation and logistics sector from 6.4% to 7.5%, the education sector from 4.9% to 6.2%, the tourism sector from 2.5% to 3%, fisheries wealth from 0.9% to 2% and the mining sector from 0.5% to 0.7%.
“The downside risk associated with the outlook is the government’s plan to cut public spending to control fiscal deficit. Public sector spending cuts are the government’s priority in 2022, continuing throughout the medium term (2022-2024), as outlined in the Medium-Term Fiscal Plan (MTFP),” the report added.