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.
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.