Released April 29, 2021 | DUBAI
en
Researched by Industrial Info Resources (Sugar Land, Texas)--The gross domestic product (GDP) for the Middle East and Central Asia is forecast to grow by 3.7% this year, compared with a contraction of 2.9% in 2020, according to the International Monetary Fund (IMF).
The GDP for just the Middle East is forecast to grow 2.5% this year, with further growth of 3.4% expected in 2022. This compares with a contraction of 4% in 2020, and a contraction of 0.4% in 2019. With a negative growth of 6.8%, Iran pulled the region down in 2019.
Regional economic growth is expected to accelerate in the second half of this year on the continued rollout of COVID-19 vaccinations, which is leading to some degree of normalcy across the region and the prospect of firmer oil prices.
The Organization of Petroleum Exporting Countries (OPEC) has raised its forecast for growth in world oil demand this year on expectations that the pandemic will start to subside. OPEC expects crude oil demand to increase 6.6% to 5.95 million barrels per day (BBL/d) this year. This is an upward adjustment of some 70,000 BBL/d from its previous forecast. Nevertheless, this is a marked decrease from the 7 million BBL/d of crude oil demand growth that was projected back in July 2020. OPEC's production cuts, which are to start easing over the coming months, have provided support for fiscal budgets.
"I think this year will be something of a reset year. But one which is still wholly dependent on how effective our regional markets are at keeping on top of any COVID spikes, whilst trying to manage that fine balancing act between maintaining financial resilience and stability, while continuing to make investments into economic growth initiatives," said Shaheen Chohan, Industrial Info's vice president of global analytics.
In total, there are 6,719 capital and maintenance projects, worth more than $908 billion, that are still active and at various stages of development in the region. This includes projects that already are under construction, as well as those in the planning and engineering stages.
Click on the image at right for a graph showing active Middle East projects by industry. Source: Industrial Info Resources, Global Market Intelligence (GMI) database platform.
Looking at only those projects that have a planned kickoff or construction start in 2021-2022, there are 4,727 planned capital and maintenance projects, worth $464 billion across the 12 energy, power and industrial markets, that are tracked by Industrial Info. This equates to 3% of the $15.5 trillion that Industrial Info's researchers are tracking, monitoring and updating daily around the world.
Click on the image at right for a graph showing active Middle East projects by country. Source: Industrial Info Resources, Global Market Intelligence (GMI) database platform.
"Last year was a tough year for all projects owners," said Industrial Info Executive Vice President Michael Bergen. "While we did see a marginal uptick in project fallout (projects being put on hold or cancelled), there was a lot of deferring of FIDs (final investment decisions) and budget approvals and rescheduling of project timelines and kickoffs. This has resulted in a lot of reshaping of our previous capex spending forecasts, with planned investments for 2020 having been pushed out into 2021 and even beyond. Due to our unique research methodology, our researchers have been able to keep on top of this continuously shifting outlook."
Looking at the composition of the $163.2 billion that is planned for a kickoff in 2021, more than $129.6 billion is rated as high or medium probability (70-99% chance of moving forward as planned). Almost $82 billion is still at the planning stages (P1 and P2), but $70.6 billion has reached the FID/budget approval stage or is in the engineering stages (E1 and E2). About $7.2 billion has kicked off or started construction. More than $55.5 billion of planned project spending for 2021 already has seen a start-date slippage of 24 months or more.
Over the 2021-22 period, grassroot developments account for $307 billion, or 66%, of $464 billion planned, with a further $115 billion of plant expansions and new unit additions. Chemical Processing accounts for 30% of grassroot investment activity. Chemical Processing is a key growth sector that is seeing stronger investments, as the region looks to further diversify its revenue streams and generate an additional economic multiplier effect from its upstream oil and gas resources.
Power generation by utilities, independent power producers (IPPs) and industrial energy producers (IEPs) accounts for a further 28% of grassroot spending. The region has a steep electricity demand outlook due to rapid industrialization and population growth, which is driving a mixed fuel capacity buildout that includes thermal, nuclear and renewables.
Beyond this, there are 728 other in-plant capital projects planned, such as modernizations, upgrades, revamps, retrofits, environmental, automation controls and equipment replacements, to list just a few categories. These projects are worth some $34 billion. On top of this, Industrial Info's researchers have identified and are tracking almost 2,100 maintenance, turnarounds and outages, worth more than $7.4 billion, that are still active and planned.
Chohan said: "The in-plant capital project market is an interesting place to play -- everyone is typically focused on the big new-build and expansionary type investments, but because of our unique research approach, we are able to also focus on what we call the 'hard-to-find' projects: those that are smaller investments, have very little visibility in the market, are often project managed in-house, but can present a major pipeline of revenue opportunities for contractors and OEMs (original equipment manufacturers)."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The GDP for just the Middle East is forecast to grow 2.5% this year, with further growth of 3.4% expected in 2022. This compares with a contraction of 4% in 2020, and a contraction of 0.4% in 2019. With a negative growth of 6.8%, Iran pulled the region down in 2019.
Regional economic growth is expected to accelerate in the second half of this year on the continued rollout of COVID-19 vaccinations, which is leading to some degree of normalcy across the region and the prospect of firmer oil prices.
The Organization of Petroleum Exporting Countries (OPEC) has raised its forecast for growth in world oil demand this year on expectations that the pandemic will start to subside. OPEC expects crude oil demand to increase 6.6% to 5.95 million barrels per day (BBL/d) this year. This is an upward adjustment of some 70,000 BBL/d from its previous forecast. Nevertheless, this is a marked decrease from the 7 million BBL/d of crude oil demand growth that was projected back in July 2020. OPEC's production cuts, which are to start easing over the coming months, have provided support for fiscal budgets.
"I think this year will be something of a reset year. But one which is still wholly dependent on how effective our regional markets are at keeping on top of any COVID spikes, whilst trying to manage that fine balancing act between maintaining financial resilience and stability, while continuing to make investments into economic growth initiatives," said Shaheen Chohan, Industrial Info's vice president of global analytics.
In total, there are 6,719 capital and maintenance projects, worth more than $908 billion, that are still active and at various stages of development in the region. This includes projects that already are under construction, as well as those in the planning and engineering stages.
Looking at only those projects that have a planned kickoff or construction start in 2021-2022, there are 4,727 planned capital and maintenance projects, worth $464 billion across the 12 energy, power and industrial markets, that are tracked by Industrial Info. This equates to 3% of the $15.5 trillion that Industrial Info's researchers are tracking, monitoring and updating daily around the world.
"Last year was a tough year for all projects owners," said Industrial Info Executive Vice President Michael Bergen. "While we did see a marginal uptick in project fallout (projects being put on hold or cancelled), there was a lot of deferring of FIDs (final investment decisions) and budget approvals and rescheduling of project timelines and kickoffs. This has resulted in a lot of reshaping of our previous capex spending forecasts, with planned investments for 2020 having been pushed out into 2021 and even beyond. Due to our unique research methodology, our researchers have been able to keep on top of this continuously shifting outlook."
Looking at the composition of the $163.2 billion that is planned for a kickoff in 2021, more than $129.6 billion is rated as high or medium probability (70-99% chance of moving forward as planned). Almost $82 billion is still at the planning stages (P1 and P2), but $70.6 billion has reached the FID/budget approval stage or is in the engineering stages (E1 and E2). About $7.2 billion has kicked off or started construction. More than $55.5 billion of planned project spending for 2021 already has seen a start-date slippage of 24 months or more.
Over the 2021-22 period, grassroot developments account for $307 billion, or 66%, of $464 billion planned, with a further $115 billion of plant expansions and new unit additions. Chemical Processing accounts for 30% of grassroot investment activity. Chemical Processing is a key growth sector that is seeing stronger investments, as the region looks to further diversify its revenue streams and generate an additional economic multiplier effect from its upstream oil and gas resources.
Power generation by utilities, independent power producers (IPPs) and industrial energy producers (IEPs) accounts for a further 28% of grassroot spending. The region has a steep electricity demand outlook due to rapid industrialization and population growth, which is driving a mixed fuel capacity buildout that includes thermal, nuclear and renewables.
Beyond this, there are 728 other in-plant capital projects planned, such as modernizations, upgrades, revamps, retrofits, environmental, automation controls and equipment replacements, to list just a few categories. These projects are worth some $34 billion. On top of this, Industrial Info's researchers have identified and are tracking almost 2,100 maintenance, turnarounds and outages, worth more than $7.4 billion, that are still active and planned.
Chohan said: "The in-plant capital project market is an interesting place to play -- everyone is typically focused on the big new-build and expansionary type investments, but because of our unique research approach, we are able to also focus on what we call the 'hard-to-find' projects: those that are smaller investments, have very little visibility in the market, are often project managed in-house, but can present a major pipeline of revenue opportunities for contractors and OEMs (original equipment manufacturers)."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
