Buildings and infrastructure contribute over US$150bn to Qatar economy, finds Arcadis report

Investment in buildings and infrastructure is playing a key and growing role in supporting Qatar’s economic diversification agenda

Investment in buildings and infrastructure is playing a key and growing role in supporting Qatar’s economic diversification agenda, according to the ‘2016 Global Built Asset Performance Index’ released today by Arcadis, the leading global Design & Consultancy for natural and built assets. 

The index, developed in conjunction with the Centre for Economics and Business Research (Cebr), examines the revenue that is generated by buildings, infrastructure and other fixed assets (homes, schools, roads, airports, power plants, malls, railways, ports) in 36 countries around the world that collectively represent 78% of global GDP. 

Built assets make a growing contribution to Qatar economy:

It is estimated that in 2016 built assets will deliver $152bn to the Qatar economy. This represents an 11% increase over the last two years, and will see the total contribution from built assets account for 44% of Qatar’s total GDP in 2016. This growth in percentage reflects the tremendous progress that Qatar has made in recent years in diversifying into new industry sectors, as well as the impact of a lower oil price, which has seen the percentage of revenue that comes from exporting natural resources decrease. 

• Fig 1 – Economic return generated from built assets in countries in MENA region 

Derek Sprackett, Head of Business Advisory, Arcadis Middle East said: “Built assets, including transport links, high quality residential and commercial property, and productive industrial centres all make a significant contribution to a country’s economic performance. In recent years, many countries across the Middle East have invested heavily and strategically in real estate and infrastructure as part of their national visions and efforts to diversify their economies. Our research shows this strategy is already paying financial dividends, as well as creating cities and communities where people want to live, work and visit.”

Qatar leads on return from built assets when measured on a per capita basis:

Qatar leads the world when it comes to securing a financial return from their built assets when this is assessed on a per-capita basis. In 2016, built assets will generate an average of US$66,316 for every person that lives in Qatar. This figure is significantly higher than any of the other 35 countries considered in this year’s study, demonstrating that Qatar has not only invested into its built environment, but it is also securing an impressive return on this capital spend.

Country Income from built assets per capita (USD) % Change since 2014
UAE $37,861 14%
Qatar $66,316  5%
Saudi Arabia $11,332 41%
Iran $8,243 10%
Egypt $3,820   7%

• Fig 2 – Total economic return secured from built assets on a per-capita basis 

Economic return from built assets to increase significantly over the next decade:

The Arcadis research also examined how the economic return from built assets would evolve over the next decade. For Qatar the study showed that the revenue contribution that comes from built assets would increase by 20% in this period, reaching a total of US$183bn by 2026. 

Country Projected income from built assets in 2026 (USD) % Change since 2016
UAE $468bn 33%
Qatar $183bn 20%
Saudi Arabia $419bn 15%
Iran $951bn 44%
Egypt $579bn 62%

• Fig 3 – Projected economic return that built assets will generate by 2026 for MENA countries

“Vision 2030 is providing an inspiring roadmap on how Qatar will develop over the coming years. Since its inception in 2008, a significant amount of progress has been made however drop in oil price has resulted in a very different economic environment. A smaller number of programmes have rightly been prioritised however the mechanics that support the delivery process also need to become more efficient. This includes the speed at which projects are procured, tenders assessed, and schemes ultimately started. This is particularly important for projects relating to the 2022 FIFA World Cup™ which is a key milestone in the overall vision but which has a much earlier delivery date,” added Sprackett.

You can view the full findings from the 2016 Global Built Asset Performance Index here: www.arcadis.com/GBAPI2016.

-Ends-

Notes to Editor:

 1. The US$36.1 trillion figure is based on the collective built asset income of the following 36 countries: Australia; Belgium; Brazil; Canada; Chile; China; Denmark; Egypt; France; Germany; Ghana; Hong Kong; India; Indonesia; Italy; Iran; Japan; Malaysia; Mexico; Netherlands; Philippines; Poland; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Spain; Sweden; Switzerland; Thailand; Turkey; UAE; UK; and USA.

2. For this research, built asset performance is measured by two quantities: the total stock of assets, and the total return from assets. The ratio between them is the return on built assets in that economy. If the return, expressed as a share of GDP, is relatively high compared to the average, while the stock of assets is about average for an economy of that size, then built asset performance is above average.

3. To compare the relative value of assets appraised in different currencies, a Purchasing Power Parity (PPP) measure is used to account for the occasionally significant variation between price levels across countries and to correct for currency fluctuations.

4. Cebr calculated the total annual return that comes from built assets by deducting the revenue from labour wages, natural resources and intangible capital from a country’s total GDP. The equation used is as follows:

• Revenue from built assets = Total annual GDP – Revenue from labour wages – Revenue from exporting natural resources – Revenue from intangible capital (IT)

Arcadis is the leading global Design & Consultancy firm for natural and built assets. Applying our deep market sector insights and collective design, consultancy, engineering, project and management services we work in partnership with our clients to deliver exceptional and sustainable outcomes throughout the lifecycle of their natural and built assets. We are 27,000 people active in over 70 countries that generate €3.4 billion in revenues. We support UN-Habitat with knowledge and expertise to improve the quality of life in rapidly growing cities around the world. www.arcadis.com

About Cebr

Centre for Economics and Business Research (Cebr) is an independent consultancy with a reputation for sound business advice based on thorough and insightful research. Since 1992, Cebr has been at the forefront of business and public interest research. They provide analysis, forecasts and strategic advice to major multinational companies, financial institutions, government departments, agencies and trade bodies.  For more information visit www.cebr.com