The construction industry in Qatar is facing challenging times, with a projected contraction of 2.8% in real terms for 2024. This follows a significant decline of 5.7% in 2023, largely due to the completion of major construction projects related to the 2022 FIFA World Cup. Other factors contributing to this downturn include high interest rates, a decrease in building permits, declining exports, and waning investor confidence.
The Planning and Statistics Authority (PSA) has reported a sharp drop in the number of new building permits issued in 2023, with a year-on-year decrease of 26.8%. Permits for residential buildings fell by 17.1%, while non-residential building permits saw an even steeper decline of 52.2% over the same period. These figures highlight the broader challenges facing Qatar’s construction sector as it navigates a post-World Cup landscape.
Despite these short-term difficulties, there is optimism for the future. The construction industry is expected to recover from 2025 onwards, with an anticipated annual growth rate of 4.7% through 2028. This rebound is likely to be driven by the government’s investment in various sectors as part of Qatar’s Vision 2030 initiative. Significant public and private investments are expected in industrial, renewable energy, housing, and the oil and gas sectors. A notable example is Qatar’s plan to expand its Liquefied Natural Gas (LNG) production capacity by 85%, from 77 million tonnes per annum (mtpa) in 2023 to 142 mtpa by 2030.
Additionally, Qatar Energy has commenced construction on the Ras Laffan Petrochemical Complex, a massive QAR21.8 billion ($6 billion) project that will include an ethane cracker plant with an annual capacity of 2.1 mtpa. This plant, expected to be completed by 2026, will significantly boost Qatar’s petrochemical production capacity to approximately 14 mtpa.
The forecast period will also see growth supported by the government’s ambitious plan to invest over QAR728 billion ($200 billion) in infrastructure development by 2030. This includes expanding the North gas field, preparing to host the 2030 Asian Games, and diversifying the economy away from hydrocarbons. These efforts are intended to strengthen Qatar’s long-term position as a desirable investment destination.
In conclusion, while the construction industry in Qatar faces immediate challenges, the long-term outlook remains positive, driven by strategic investments and government initiatives aimed at fostering economic diversification and infrastructure development.
