Why GCC education sector offers $90bn of opportunities for contractors
GCC governments will spend more than USD90 billion on education-related construction projects by the end of 2014, according to The Big 5 report by Ventures Middle East.
It makes the education sector one of the biggest for contractors and suppliers with the population in the GCC forecast to increase from 50.6 million in 2014 to 55.8 million by 2018.
Saudi Arabia is the biggest investor in education with an expected spend of USD56 billion. It will construct 465 new schools and refurbish 1,500, alongside 1,544 existing school construction projects. It is also building eight new colleges and new vocational and technical facilities.
Sabah Al-Salem University – Kuwait University City, College of Arts - Courtesy Image © Perkins+Will.
Ventures prepared its education sector report in advance of The Big 5 construction exhibition in Dubai in November, where opportunities for developers to meet the region’s demands for schools will be highlighted.
“There are huge business opportunities for suppliers who understand the education sector,” said Andy White, event director for The Big 5. “The GCC has a young demographic and governments are investing heavily in education.”
White said The Big 5 would offer a unique insight into the education sector through its free-to-attend conference and workshop programme. He said: “The Big 5 workshops during the show will examine the huge refurbishment market in the region and look at the technology expected in 21st century school buildings.”
The report says: “Governments of each GCC nation are investing significantly in construction of new schools and refurbishment of existing schools which is expected to drive the construction opportunities in the education sector in the region.”
The total number of students in the GCC region is expected to grow from 11.1 million in 2014 to 11.6 million by 2016.
GDP per capita income in the GCC is estimated to grow from USD 45,184 in 2011 to USD 51,286 in 2016 and that will benefit education, according to the report: “The increase in income will have a positive effect on the willingness to spend on education, especially for private sector education.”
In the UAE, USD2.6 billion (21% of its 2014 budget) is being spent on schools and all new buildings meet the country’s green construction Estidama rating. Qatar has allocated USD7.2 billion to education, which is 7.3% up on the previous year. Oman is initiating a process to provide free basic education to all its nationals spending USD6.8 billion, which is 18.6% of the total public expenditure. Kuwait will spend 14.2% of its annual budget for the year (2013-2014) which is USD10.5 billion. Bahrain has allocated USD2.2 billion to continue to improve the education process for the fiscal years 2013-2014.
The Big 5 runs from 17 – 20 November at the Dubai World Trade Centre and is open from 11:00am to 7:00pm daily.