Construction in Kuwait

by Sameer Joshi or 01-Jun-2018

Construction activity in Kuwait was weak in 2017, following the economic slowdown and low oil prices, which resulted in a deteriorating business environment. In addition, the government decreased its oil production capacity in 2017, in order to meet the output target of the Organization of the Petroleum Exporting Countries (OPEC). The government decreased the total production of crude oil by 6.9%, going from 2.9 million barrels per day in 2016 to 2.7 million in 2017. Consequently, the country’s construction industry contracted by 3.5% in real terms in 2017, and the output value, measured at constant 2017 US dollar exchange rates, declined from US$12.2 billion in 2016 to US$11.7 billion in 2017.

 Energy and utilities construction was the largest market in the Kuwaiti construction industry during the review period, accounting for 25.7% of its total value in 2017. The market is expected to account for 24.5% of the industry’s total value in 2022. Growth is expected to be supported by the government’s aim to increase the share of renewable energy in the country’s total energy mix. By 2030, the government aims to meet 15.0% of the energy demand from renewable sources. 

The industry is expected to post positive growth over the forecast period (2018–2022), supported by the recovery in oil prices, with increased production volumes, as well as investment in government programs such as the Kuwait National Development Plan (KNDP) 2035 and the Five-Year Development Plan 2015-2020. Further support will come from urbanization and population growth, as well as government policies to attract foreign investment in the manufacturing industries.