MENA economic review
As of Q3 2022, the International Monetary Fund (IMF) forecasted the Middle East and North Africa (MENA) regions’ GDP to grow by 4.95 per cent for full year 2022. This represents an increase from 4.49 per cent reported in 2021, indicating a continued increase of economic activity and recovery post-coronavirus. Despite this, the overall MENA region continues to have an uneven recovery across its markets and countries, reinforced by the factors affecting global economies and by the disparity of available fiscal stimulus between oil importing and exporting countries.
Source: IMF, World Economic Outlook Database, October 2022
Source: IMF, World Economic Outlook Database, October 2021
Source: Haver Analytics, National Sources, Emirates NBD Research July 2022
MENA economic challenges and risks
The MENA region will continue to face specific challenges in 2023, especially as governments continue to manage economic recovery post-pandemic. Factors such as political instability, extreme unemployment, economic uncertainty, economic relief disparity and the ongoing conflicts in countries such as Ukraine, Syria and Yemen, all remain challenges to the stability and recovery of the region. The MENA region is noted as being especially vulnerable and it continues to require swift and effective reforms to prevent further financial economic impacts and to expedite recovery in 2023.
The key risks associated with the MENA region include:
New viruses/ variants
Institutional/ social fragility and corruption
Extreme weather/rising sea levels/floods/droughts
And under-employment, especially for youths and females
Exporting and importing reliance
Violence, protests and social unrest
Education/skills/gaps
Disruption of operations or theft of data/ money
MENA Construction Market Review
The overall outlook for the MENA region’s construction sector continues to remain optimistic, bolstered by the GCC’s improving fiscal situation as oil prices remain buoyant.
Considerable prospects continue to be forecasted in KSA, the UAE and Egypt and are set to pave the way forward in the region.
The ongoing driving force behind the MENA region’s construction resilience is the need to diversify and develop their economies to meet the demands of its rapidly growing population, and overall, lessen its economic reliance on finite and economically volatile fossil fuels.
The pipeline of projects across the Gulf is estimated at around USD 3.1 trillion, with the GCC equating to over 81 per cent (USD 2.5 trillion) of this market value. The largest segment of construction projects remains in transportation infrastructure and building real estate, including the development of schools, hospitals and social infrastructure to advance existing and growing populations.
According to MEED, Middle East project awards for 2022 is set to increase by another 20 per cent compared to awards in 2021 (based on Q3 2022 data). This indicates construction activity in the region is beginning to reach pre-pandemic levels of 2018/2019 and is a further positive increase from the 22 per cent experienced between 2020 to 2021.
Considerable project awards in non-energy construction have begun to be seen this year, especially in KSA with an increase of 158 per cent compared to the same period the previous year (2021). Awards in Egypt are up 254 per cent, the UAE is up 62 per cent, and as anticipated, Qatar’s market has softened, posting a decline of 49 per cent during 2022 whilst approaching the World Cup.
In KSA, development parties in the region are focused on the expansion of its infrastructure to support the development and expansion of its PIF led giga-project programs. The UAE has awarded 62 per cent more projects than in the same period last year, 2021, with a marked focus on the building sector and residential real estate.
This indicates an upward trend in project activity post the challenges faced during the pandemic and following on from the positive impact of Expo 2020. Although we are seeing a downturn in Qatar’s project awards, the aviation sector is set to increase with ongoing Hamad International Airport terminal and cargo expansions set for 2023 and onwards.
Project awards are expected to grow further looking to 2023. This is bolstered by Saudi Arabia’s Vision 2030, Egypt’s continued commitment to infrastructure, the increased business sentiment following Expo 2020, buoyant oil prices, and the overall effect of the global economic recovery.
Source: Meed 2022 Q3
MENA Awarded Contracts
The country with the highest value of awarded projects in 2022 was Saudi Arabia, with an approximate total of USD 35 billion (tracked to end Q3 2022). This equates to a 43 per cent market share (recorded by MEED). This was followed by Egypt with USD 17.4 billion — a 21 per cent market share. In third place was the United Arab Emirates with USD 10.8 billion, equating to a 13 per cent market share.
The busiest sector for project awards was transport infrastructure which saw a 28 per cent share, followed by building construction at 17 per cent. Oil projects came in third with 15 per cent, power projects were at 14 per cent and gas projects 12 per cent.
Of Saudi Arabia’s USD 35 billion investments this year, USD 8.8 billion was committed to the commencement of infrastructure packages for the Government/PIF led NEOM giga-project, Diriyah Gate Development Authority (DGDA), Rus al-Madinah Holding (RMH), Royal Commission of Riyadh City (RCRC) and The Red Sea Development Company (TRSDC). This signals a continued commitment to their ambitious diversification plans and enabling works for major construction builds that lead into 2023 and beyond.
According to MEED, a further USD 16.5 billion was awarded for buildings (5bn), power (5.5bn), industrial (2bn), water (3bn) and chemical (1bn) projects. With key projects awarded for Qiddiya Water Park, King Salman International Park – Royal Art Complex, Phase 2 of ACWA’s Renewable Energy Program, Saudi Water Partnership Company’s (SWPC) Shuaibah reverse-osmosis desalination plant and LUCID’s Electric Car Manufacturing Plant, further highlighting the extent of the Kingdom’s diversification efforts.
In Egypt, USD 10 billion of its USD 17.4 billion that was recorded in 2022, compromised projects relating to the expansion of its high-speed rail network. A consortium made up of Siemens Mobility, Orascom Construction and The Arab Contractors signed contracts with the Egyptian National Authority for Tunnels (NAT) to design, install, commission and maintain a 1,800 kilometre high-speed rail network. Other key awards were in the power sector with the USD 2.2 billion Atomstroyexport - El Dabaa 48000MW Nuclear Power Plant, Nuclear Island (Block 2) project awarded to Korea Hydro & Nuclear Power Co. and the award of the USD 1.5 billion Egyptian Electricity Transmission Company (EETC) - 1.1 GW Wind Independent Power Project (IPP). These projects signify Egypt’s continued investment in strategically important projects to meet the Government’s vision for 2030.
The UAE saw USD 7.4 billion of its USD 10.8 billion awarded to building and infrastructure works in Q3 2022. This mainly consisted of residential housing projects with key developers awarding the following values; Aldar USD 0.69 billion, Emaar USD 0.42 billion, Damac USD 0.41, Nakheel USD 0.4 billion, ARADA USD 0.34 billion. Other key projects were awarded for Abu Dhabi Ports - CMA Terminals Khalifa Port: Phase 2, Binghatti Developers - Burj Binghatti Jacob & Co Residences and Miral - Natural History Museum Saadiyat Island. The outlook for the UAE remains prosperous due to the boosted tourism and property purchases following the start of the Ukraine-Russia conflict, increased activity in upstream sour gas production, reworked metro and rail expansions and the reignition of shelved development projects. In addition, its commitment to the development of technology companies, also helps set the nation up for positive growth in acute juxtaposition to the many struggling economies across the globe. As reported by MEED, of Qatar’s USD 10.8 billion in awarded projects, circa USD 6.8 billion, was recorded for gas projects as they look to increase production as part of their long-term expansion strategy to boost LNG capacity by 64 per cent for 2027. Further investments were seen in Sewage Treatment Works in Al Wakrah and Al Wukair as part of Qatar’s first Public Private Partnership in the field of sewage network projects.
Amidst political restrictions in Kuwait, the Public Authority for Industry (PAI) has awarded the infrastructure package for Shaddadiya Industrial Area Zone to United Gulf Construction and signals a step forward in providing 1,036 industrial plots, ranging from 1,000 to 10,000 square meters for food, chemical and industrial activities.
In Oman, improved oil prices have seen increased construction activity in 2022, for example the joint venture between Oman Tourism Development Company (OMRAN Group) and Diamond Developers, named Sustainable Development and Investment Company (SDIC). This group awarded packages for Phase 1 of the USD 1.0 billion Yiti Sustainable City project.
Key awards in Bahrain saw Al Sorouh award the Avenues Mall Phase 2 Expansion project to Nass Group, along with several other social apartments and infrastructure improvement projects. Looking across the pipeline of projects, the launch of Bahrain’s USD 30 billion Strategic Projects Plan in late 2021, that is set to increase the total land area by more than 60 per cent, and the tendering of USD 3.5 billion King Hamad Causeway project as a public-private partnership, show considerable prospects in the country in the journey to realise its Economic Vision 2030. Furthermore, in conjunction with Bahrain being known as a gateway country for business in Saudi Arabia, the considerable uplift in business activity in Saudi Arabia means that the outlook for the country is expected to remain strong for years to come.
Source: MEED 2022 Q1-Q3
Source: MEED 2022 Q1-Q3
Source: MEED 2022 Q1-Q3
MENA Construction Considerations
The growth of the construction market will continue to depend on MENA governments implementing stimulus packages for 2023 and beyond.
The pandemic caused many set backs in construction activity and has provided new focus and opportunities as businesses are now realigning to drive new efficiencies and help rebuild broken supply chains and seek more collaborative approaches.
An important lesson learned from 2021 and 2022 cautions that contractual parties need to diligently review and understand the relief provisions within construction contracts. In MENA (particularly the Middle East), it is common to see standard contract terms and conditions adapted and amended; this will be an important consideration with certain provisions, like Force Majeure (which typically does not explicitly list pandemics and epidemics), to be amended to ensure a balance of risk between the parties.
There are revised mindsets across construction markets as clients and construction organizations battle with market price volatility and delays to project execution and delivery, specifically over the last two years. This is encouraging certain developers and contractors to renegotiate existing prices (as contracts allow) and focus on commercial considerations during contract renegotiation.
Overall, there is a focus to improve transparency, encourage healthier agreements between client and contractors, and enhance the procurement stance of projects in the region. However, the RICS emphasizes that during negotiations certain considerations should be made, such as reviewing project value drivers, assessing capacity within the construction market and allocating risk. The allocation of risk and overall security should be key considerations during the review and decision-making process.
Key considerations:
MENA Construction - Strengths, Weaknesses, Opportunities and Threats
Post-pandemic, and leading into 2023, a new normal is expected in the region with an opportunity for transparency, trust and a collaborative approach within supply chains and between stakeholders.
The change is anticipated to see greater cashflow management and improvements to contractual terms and conditions.
Looking at the key strengths, weaknesses, opportunities and threats for construction in the region, it is clear there are many strengths and opportunities set to support the buoyancy and growth of the MENA construction market moving into 2023. However, this is expected to be disproportionate across countries.
- Capability of delivering complex and bespoke structures
- Diversification and government incentive to invest
- Creating and providing employment opportunities
- Supporting local talent and industries
- Economic value creation
- International input/supply/location/ability to import
- Construction speed
- Reduced bureaucracy
- Cheaper cost of labor
- Payment delays
- Procurement timescales and awarding contracts before design completion
- Carbon emission and environmental impact
- Missed opportunities for lessons learnt from project to project
- Resources, transient population/talent gap
- Safety issues
- Cyber security
- Quality issues
- Lack of skilled labor
- Sustainable construction processes
- New business markets
- Collaboration among industry stakeholders
- Digital transformation
- New materials/construction techniques
- Encouraging career opportunities for young graduates
- International investment
- ESG funding
- Public Private Partnership
- Modular construction
- Continued coronavirus restrictions
- Supply chain disruptions
- New pandemic variants
- Delay of adopting new technology and missed innovation opportunities
- Communication
- Precedence of contract awards to lowest price
- Misuse of value engineering with a risk to quality
- Inflation /escalation
MENA Construction Risk Mitigation
In terms of weaknesses and threats, significant challenges remain to the construction market and its successful delivery and recovery.
One of the key challenges to be faced in 2023 is the pandemic-induced escalation of commodity prices. Notably, since the start of 2021, average prices for steel (structures and reinforcements), aluminium, copper and chemicals remain elevated regionally and across the globe.
According to a MEED report, ‘as the construction industry grapples with higher costs, clear communication and consensual project adjustments are key to addressing stakeholder interests’.
Some of the key topics leading into 2023, in terms of recovery and mitigating risk in the MENA region, are:
MENA Construction Trends and Prospects
In parallel to other regions, carbon footprints and fighting climate change will present new opportunities on the horizon. Especially as the overall construction industry is a key benefactor in the matter of environmental conservation.
This is a rising trend focusing on the manufacturing of construction building equipment and materials, with a drive for greater quality of work and cost-effective solutions. New innovative IT delivery will look at evolving the construction industry; improving general service delivery and modernizing buildings, with a fresh safety viewpoint.
Safety is a focal point on all projects for both construction workers and the public. Revised safety regulations will soon be applied to construction equipment and machinery on future construction projects by contractors and developers alike. With the focus on reducing the spread of coronavirus still present as we head into 2022, maintaining newly adopted safety protocols are essential in ensuring construction sites remain operational.
As a rising trend through 2021, assisted by the issue of remote working, remote technologies help to mitigate problems with administrative and building construction works. An example of this is how the use of drones within the construction industry is on the rise, assisting in the quantification process and identifying and mitigating safety hazards.
There is a new trend around the development of living materials being applied to construction, such as when biological materials are used to support concrete construction, insulation and flooring such as ‘bacteria’ and ‘fungi’ in replacement for far less sustainable materials.
As a lesson learned from the start of the pandemic, contractors had little choice but to pay premium prices for materials and alternative suppliers due to the disruptions caused. 2022 will see stakeholders in the construction industry re-evaluating and streamlining current procurement relationships. This may come with a risk in coordination, however, the industry envisages cost efficiencies through diversification.
This has already taken off within the construction industry and looks to grow at a record pace in 2022.
This will remain in the spotlight across MENA, with countries highlighting the service market through stimulus packages, which will also aid the construction recovery in 2022.
KSA review
The Kingdom of Saudi Arabia’s (KSA) spending budget for 2023 has been approved at USD 295 billion (circa 16 per cent increase on 2022’s spend of USD 255 billion) and is expected to post another budget surplus as it continues to stabilize public spending amidst boosted revenues from higher oil prices.
After posting its first fiscal surplus in nearly a decade in 2022 (preliminary estimate USD 27 billion, 2.6 per cent of GDP), the Kingdom’s finance ministry forecasts to achieve a surplus of USD 4.25 billion or 0.4 per cent of GDP in 2023.
This is considered somewhat subdued compared to the previous year’s surplus, but as analysts suggest, the expected revenues are considered modest and based on oil prices that are much lower than what is forecast for the year ahead.
The IMF recognises Saudi Arabia as one of the world’s fastest-growing economies in 2022, with sweeping pro-business reforms, a sharp rise in oil prices and recovery of oil production power. GDP is expected to expand by 7.6 per cent 2022, the fastest growth in almost a decade and forecasts growth at 3.6 per cent for 2023.
Oil prices play a pivotal role in the country’s economy with around 40 per cent of Saudi Arabia’s GDP attributed to oil. In 2022, oil prices were expected to stabilize and somewhat reduce from peaks seen in 2021, but as the Russia-Ukraine conflict unfolded, brent crude moved above USD 139 per barrel in March 2022 amongst fears of supply shortages. In addition, as the demand for fuels depressed, largely due to China’s reduced industrial and economic output from strict lockdowns, oil prices began to subside. With Saudi Arabia playing a leading role in OPEC as it makes up around one-third of the organisations oil reserves, it is pivotal in decision-making for production policy.
As oil prices reduced in 2022, this was when the decision was made by OPEC members to cut production, despite the pressures from the US to keep oil prices buoyant. Although the gains in oil prices in 2022 are now at around levels seen at the beginning of the year, the outlook for oil remains positive for 2023 as the global demand is expected to increase alongside the lifting restrictions in China.
In construction, KSA will continue to contribute the largest volume of new construction project opportunities in the MENA region in 2023. The major catalyst for this investment is KSA’s Vision 2030 that fronts the estimated USD 1,350 billion of construction projects currently planned in the Kingdom.
Saudi’s Crown Prince, His Royal Highness Mohammed bin Salman, launched Vision 2030 in 2016 with the aim of dramatically transforming and modernizing Saudi Arabia and reducing its economic reliance on oil revenues. This strategy outlines economic and financial reforms and looks to utilise the country’s investment power to create a thriving, diverse and sustainable economy for its population. Leading this drive is the Public Investment Fund, the Kingdom’s sovereign wealth fund, which has disclosed plans to invest up to USD 266 billion into new projects by 2025.
KSA key developments overview
Key projects that are paving the way for the Kingdom’s Vision 2030 are:
NEOM: At the center of Saudi Arabia’s Vision 2030 program, NEOM is a new futuristic mega-city located in northwest Saudi Arabia, on the Red Sea coast. It has a total estimated value of USD 500 billion. NEOM is expected to host a population of more than one million and is set to be a hub for innovation and a sustainable ecosystem for working and living.
The Red Sea Project: Set across 28,000km2 and nine islands, this giga-project is underway. Consisting of 50 hotels (circa 8,000 keys), a new airport and leisure and lifestyle facilities served by 75km of new roads.
AMAALA: An ultra-luxury tourism project, spanning over 4,100km2 and will include 2,500 hotel rooms, estate homes and 800 villas. The target is for an operational zero-carbon footprint with the project tracking more than 15 sustainability criteria.
Diriyah Gate: A USD 50 billion mixed-use historic, cultural and lifestyle destination west of Riyadh. The project’s intent is to showcase Saudi Arabia’s 300+ year history through a set of heritage, hospitality, education, retail and dining experiences for residents, tourists and frequent visitors.
Qiddiya: An entertainment, sports and arts hub, located in southwest Riyadh. Qiddiya is set to include a Six Flags theme park, FIA grade-one racetrack, a Jack Nicolas golf course and several arts and cultural centers.
ROSHN: Around USD 90 billion has been assigned to create large-scale modern and integrated communities for Saudi nationals in nine cities across four regions in KSA. The project has a goal to increase the rate of home ownership to 70 per cent. The first contract to be signed is a 3,000-home community, including associated infrastructure, in North Riyadh close to King Khalid International Airport.
AlUla: As a cornerstone of the Kingdom’s cultural and touristic ambitions, the AlUla project looks to develop one of country’s most important archaeological and cultural destinations and prepare it to welcome visitors from around the world. This major investment aims to make the AlUla region the Kingdom’s cultural capital and another key tourist destination.
Green Riyadh: A large-scale urban forestation project across Riyadh city to plant circa 7.5 million trees in 3,330 neighbourhoods, 43 parks, 9,000 mosques, 6,000 schools, 64 universities, 390 healthcare facilities and 1,670 public facilities. Trees will also line 16,400 kilometres of streets, roads, utility lines (pylons, oil pipelines, etc.) and 272 kilometres of valleys.
Source: Saudi Arabia MoF
Source: Haver Analytics, Emirates NBD Research July 2022
KSA key developments overview
Key projects that are paving the way for the Kingdom’s Vision 2030 are:
NEOM: At the center of Saudi Arabia’s Vision 2030 program, NEOM is a new futuristic mega-city located in northwest Saudi Arabia, on the Red Sea coast. It has a total estimated value of USD 500 billion. NEOM is expected to host a population of more than one million and is set to be a hub for innovation and a sustainable ecosystem for working and living.
The Red Sea Project: Set across 28,000km2 and nine islands, this giga-project is underway. Consisting of 50 hotels (circa 8,000 keys), a new airport and leisure and lifestyle facilities served by 75km of new roads.
AMAALA: An ultra-luxury tourism project, spanning over 4,100km2 and will include 2,500 hotel rooms, estate homes and 800 villas. The target is for an operational zero-carbon footprint with the project tracking more than 15 sustainability criteria.
Diriyah Gate: A USD 50 billion mixed-use historic, cultural and lifestyle destination west of Riyadh. The project’s intent is to showcase Saudi Arabia’s 300+ year history through a set of heritage, hospitality, education, retail and dining experiences for residents, tourists and frequent visitors.
Qiddiya: An entertainment, sports and arts hub, located in southwest Riyadh. Qiddiya is set to include a Six Flags theme park, FIA grade-one racetrack, a Jack Nicolas golf course and several arts and cultural centers.
ROSHN: Around USD 90 billion has been assigned to create large-scale modern and integrated communities for Saudi nationals in nine cities across four regions in KSA. The project has a goal to increase the rate of home ownership to 70 per cent. The first contract to be signed is a 3,000-home community, including associated infrastructure, in North Riyadh close to King Khalid International Airport.
AlUla: As a cornerstone of the Kingdom’s cultural and touristic ambitions, the AlUla project looks to develop one of country’s most important archaeological and cultural destinations and prepare it to welcome visitors from around the world. This major investment aims to make the AlUla region the Kingdom’s cultural capital and another key tourist destination.
Green Riyadh: A large-scale urban forestation project across Riyadh city to plant circa 7.5 million trees in 3,330 neighbourhoods, 43 parks, 9,000 mosques, 6,000 schools, 64 universities, 390 healthcare facilities and 1,670 public facilities. Trees will also line 16,400 kilometres of streets, roads, utility lines (pylons, oil pipelines, etc.) and 272 kilometres of valleys.
Kingdom of Saudi Arabia Highlights 2022
In July 2022, His Royal Highness Mohammed bin Salman, Crown Prince and Chairman of the NEOM Board of Directors, announced the designs of The Line, its city of the future in NEOM. HRH Crown Prince Mohammed bin Salman said: “At The Line’s launch last year, we committed to a civilizational revolution that puts humans first based on a radical change in urban planning. The designs revealed today for the city’s vertically layered communities will challenge the traditional flat, horizontal cities and create a model for nature preservation and enhanced human liveability. The Line will tackle the challenges facing humanity in urban life today and will shine a light on alternative ways to live.”
At the 41st OCA General Assembly on 4 October 2022 in Phnom Penh, Cambodia, Saudi Arabia won the bid to host the 2029 Asian Winter Games. This is planned to be held at the Trojena Development as part of the NEOM giga-project and is expected to be completed by 2027. The year-round destination is expected to comprise a ski village, nature reserves, luxury hotels, wellness resorts, retail stores and restaurants. In addition it will host various sporting activities, including skiing, water sports and mountain biking.
In December 2021, the GCC supreme council approved the establishment of the GCC Rail Authority, which began activity in June 2022 to oversee and manage the implementation and integration of the region’s railway network. The network is expected to run from Kuwait City through to Saudi Arabia via Jubail and Dammam, and then on to linking the major cities of Manama in Bahrain, Doha in Qatar and the UAE cities of Abu Dhabi, Dubai and Fujairah before reaching Muscat, Oman. Other countries in the Middle East, such as the UAE and Qatar, have also taken steps to develop their domestics rail networks in 2022.
In November 2022, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, as part of the Saudi Green Initiative at COP27, announced that Saudi Arabia will host the MENA Climate Week in 2023. As Saudi Arabia looks to finalise plans for developing 10 more new renewable energy projects and connect an additional 840 megawatts of solar PV to its power grid, the Minister called for action in the form of practical solutions and creating more opportunities to pool resources and collaborate to overcome challenges together. As part of Saudi Arabia’s Vision 2030, renewable energy is a central subject as plans have been announced for more than USD 100 billion investments in renewable energy projects with the strategic aim to produce 50 per cent of its electricity from renewables by 2030.
Hydrogen is considered to be a renewable or “green” fuel, especially if its electricity comes from renewable sources, because it is able to be produced without CO2 emissions. In March 2022, Saudi Arabia commenced construction on a USD 5 billion wind and solar powered hydrogen plant at NEOM. The facility is planned to be on stream by 2026 and is expected to produce up to 600 tonnes of green hydrogen per day, making it one of the largest hydrogen plants in the world. At the end of 2021, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman Al-Saud, said the Kingdom has plans to be the biggest producer of hydrogen in the world as it aims to produce 2.9 million tonnes per annum (tpa) by 2030 and 4m tpa by 2035.
KSA: Key challenges in 2023
-Oil/energy prices -Metal prices -Timber prices -Cost of living -Salaries -Supply/transportation costs -Pricing of risk -Readiness of supply chains
-Mobilisation -Staff retention/attrition -Resource capacity -Availability in the market -Unknown contracting capacity -Accommodation
-Unviable award prices -Tendering rates at historic norms -Contractor liquidity -Focus of contractors on securing works over delivery -Risk adverse pricing
The major challenges for the KSA construction market are centred around inflation, readiness of supply chains to meet local cities and remote location demands, and the ability to attract private sector and foreign investment.
As Saudi Arabia’s ambitious plans begin to move from inception and design phases to construction, the market is expected to further experience some of the following challenges:
-Ability and willingness of contractors to fix prices and fluctuation clauses. This will need more collaborative procurement and sharing of risk.
-Impacts on lead times and therefore schedule, as the industry adapts to find alternative markets for materials e.g. aluminium, steel, rebar, timber.
-Works that are considered competitive bids are routinely being undercut, raising further concerns about financial stability. This means a higher risk of insolvencies.
-Global supply disruptions put further pressures on supply certainty and pricing. Sea freight capacity and costs are currently lower than the peak reached in September 2021, but costs remain considerably higher than industry norms due to inflationary pressures and ongoing pandemic restrictions in China.
-Securing of supply: Considerations should be given to potentially placing advanced orders/payments for specific materials up front where there is enough certainty on scope and specification to be able to do so with confidence, as ongoing price escalations continue to be an issue.
-Industry draw and focus on giga-project growth, leading to difficulties in staff retention and therefore project continuity as schemes become under-resourced and leading to potential negligent contracts.