CONSTRUCTION NEWS
Mena construction output growth revised over Covid, low oil
Jun 20, 2020 8:17 AM
The construction output growth for this year in the Middle East and North Africa (Mena) region has been revised to -2.2% (down from -1.4% previously) even as the sector expects further cuts mainly due...
The construction output growth for this year in the Middle East and North Africa (Mena) region has been revised to -2.2% (down from -1.4% previously) even as the sector expects further cuts mainly due to the impact from Covid-19 and low oil prices, according to GlobalData, thus reflecting the disruption caused by the spread of Covid-19 and the weaker economic outlook.
The immediate business impact of preventative measures against the coronavirus pandemic has hit the commercial sector hard.
When businesses reopen and restrictions on movement are eased more during the third quarter, demand is only expected to rebound marginally and the recovery in spending will be contingent on confidence picking up, according to GlobalData.
The lockdown is also likely to lead to long-lasting changes in consumer behavior and shape future investments in the sector, it added.
Yasmine Ghozzi, the economist at GlobalData, said: "Despite oil exporting countries’ efforts to shore up oil price to slightly compensate for the loss of revenue, the collapse in tourism is likely to reduce GDP by 3% in Egypt, Morocco and Tunisia and remittances from oil rich Gulf and Europe."
"The decline in company earnings and government revenue will ensure that planned investments will be curtailed in the coming quarters," she cautioned.
The immediate business impact of preventative measures against Covid-19 has hit the commercial sector hard. When businesses reopen and restrictions on movement are eased more during the third quarter, demand is only expected to rebound marginally and the recovery in spending will be contingent on confidence picking up.
The lockdown is also likely to lead to long-lasting changes in consumer behavior and shape future investments in the sector.
"Providing some scope for further gains in oil prices, Opec + has agreed to cut output by 9.6 million barrels a day from July," remarked Ghozzi.
"Any member that does not comply with 100% of its curbs in May and June will make extra cuts from July to September to compensate. Following the announcement, Brent crude has risen, and is more than doubled the level in late April," she added.-TradeArabia News Service
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