Fit-out industry chasing US$59 billion in GCC contracts.

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30 Oct 2008

While the regional construction boom peaks this year at around US$330 billion, the world's major suppliers of furniture, fixtures and fittings are descending on Dubai to chase contracts potentially worth US$59 billion next year, according to an industry expert.

"Regional construction may witness some slowing down over the coming years but there are still record breaking contracts across the Gulf Co-operation Council (GCC) countries for the fit-out of commercial and residential buildings, hotels, retail outlets and mixed-use developments reaching completion next year," said Kim Willis, exhibition director of Index, the largest interiors event of its kind in the Middle East and Asia.

The peak this year in current civil construction projects across the GCC comes at the end of a steep three-year climb and as the world economic slowdown begins to bite. As global and regional economies enter a new phase, however, potential budgets for the interior fit out of buildings reaching completion in 2009 and 2010 continue to show major growth potential, according to statistics compiled by project database company Proleads.

In the United Arab Emirates alone, contracts worth up to a potential US$51 billion could be awarded in 2009, rising to US$73 billion in 2010. The biggest single sector for potential growth is in mixed use developments which could see total contracts valued at around US$40 billion next year.

"There is, of course, some uncertainty in the market as to how far the slowdown in the property development will impact with projects possibly being scaled down or put on hold," Willis added. "The cost of fit-outs may also fall somewhat as contractors seek to remain competitive.

"In the medium term, however, spending on fitting out completed buildings retains major growth potential. It is no wonder that exhibitors are clamouring for floor space at Index 2008. There is enormous potential demand for residential, contract and public furniture, flooring and wall coverings, lighting and art, accessories and window products, textiles, ceramics, kitchen and bathroom furniture and interior design services."