Middle East Biannual Construction Market Report 3Q/4Q 2024
Qatar
Economy and political context
According to data from the Qatar Statistics Authority, the economy continued to grow during 2023. Estimates indicate that the GDP at constant prices rose by 1.2%, supported by the growth of the hydrocarbon sector by 1.4% and the non-hydrocarbon sector by 1.1%.
The International Monetary Fund projects that Qatar’s economy will grow by 2% by the end of this year, with annual growth rates expected to rise to 4.1% in the medium term (2025–2029). This growth is anticipated to be supported by expansions in gas production, manufacturing initiatives and the Third National Development Strategy.
The construction industry will also play its part as megaprojects commence, such as the recently announced QAR 20 billion Simaisma project.
Qatar’s Consumer Price Index (CPI) rose to 107.8 points in September — a monthly increase of 0.33% and a year-on-year rise of 0.82%.
According to data from the National Planning Council, the increase in CPI was due to price increases in various groups. Recreation and culture was up 3.15%, education by 1.31%, miscellaneous goods and services by 1.09%, clothing and footwear by 0.90%, while restaurants and hotels saw a 0.26% rise.
Materials and labour
The latest data from Revelio Labs shows an increased number of active construction job postings this year compared to 2023.
Following the surge in construction projects in the lead-up to the 2022 FIFA World Cup hosted by Qatar, construction growth was expected to moderate in 2023. However, sizeable infrastructure and hospitality projects in Qatar’s pipeline now require labour to support economic diversification and growth.
Just over nine in ten respondents said they did not experience or notice either labour supply issues or increased labour rates in the last six months.
Qatar has a large migrant worker population comprising most of the country's total population — many of whom make vital contributions to the country's ongoing construction projects.
National Museum of Qatar – Gleeds provided Quantity Surveying/Cost Management services.
Tendering and contracts
According to data from the National Planning Council, the number of building permits and completion certificates issued have been steady over the last year. As Qatar pursues its Vision 2030 programme, the provision of high-quality housing and amenities for the population will require further permits — largely consisting of apartment blocks and villas driven by public and private sector investment.
Three-quarters of respondents said tender opportunities decreased in the last six months, with just over one in five saying they had increased.
The majority (42%) saw tender opportunities remaining the same over the next six months — an even split of 29% for each forecast opportunities decreasing and increasing.
Despite an oversupply of real estate in certain sectors like hotels, the creation of free trade zones and industrial development present potential opportunities that align with the nation’s long-term vision.
Four in ten respondents said they or their supply chain declined a tender in the last six months. The proposed tendering/contract conditions/risk profile comprised almost half (46%) of the reasons for declining.
Notably, no respondents said the reason was solely due to a lack of capacity — reflecting Qatar’s continued abundance of labour availability.
Most respondents said that typical main contractor overhead and profit margins are currently at the higher end of the range. While the number of construction projects has slowed since the 2022 FIFA World Cup, the responses indicate that high-value projects continue to break ground. Higher overhead and profit levels enable investment and innovation.
Msheireb Downtown Doha - Phase 3 – Gleeds provided Quantity Surveying/Cost Management services.
Construction tender price inflation forecasts
Global tensions were ranked as the biggest threat to the construction industry. A number of recent geopolitical events, such as the confrontation between Israel and Iran, have caused wider concern about potential hikes in raw material prices, as the shipment of goods could be delayed significantly if Iran blocks the Strait of Hormuz.
Investor confidence is also crucial in attracting further funding for the region’s ambitious development and sustainability targets.
Half of respondents forecast tender opportunities increasing in 2025 compared to 2024, while almost three in ten saw the opposite occurring.
Qatar’s Public Works Authority, Ashghal, currently has several tenders out across different sectors. Meanwhile, the government’s plans for improving the country’s road and railway transportation should see more infrastructure projects come to fruition.
Figure 20
Inflation forecasts table
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