DOHA: Qatar’s construction inflation could reach a high 18 percent per annum over the next decade unless an effective action is taken, cautioned a built asset consultancy firm.
EC Harris, the global built asset consultancy said Qatar’s construction sector is poised to expand by an average of 12 percent a year. While this is a remarkable opportunity to propel Qatar forward, the ability of the supply chain to absorb fluctuations in workload is limited. The potential consequence of this is that the risk of price fluctuations in response to workload increases — and with this comes a heightened threat of inflation.
The report sets out a series of potential construction inflation scenarios linked to Qatar’s construction programme up until 2023. Construction inflation is set to peak during the World Cup construction boom between 2016 and 2019 which could potentially add billions to the cost of Qatar’s development, causing the market to overheat.
The EC Harris report recommends a number of steps to mitigate the risk: Including to boost the capacity and capability of the existing supply chain — by encouraging local companies and international contractors to combine their skills. It also prescribed to increase the ease with which materials and labour can be transported — by developing a Qatar-wide solution for the location and quality of labour accommodation, building these facilities in advance to mitigate additional contractor costs.
Terry Tommason, EC Harris’ Head of Property and Social Infrastructure Middle East, said: “Qatar has seen a remarkable transformation in less than a generation... However, this unprecedented growth brings challenge as well as opportunity. By taking action now, there is every reason to believe that construction inflation can be avoided.”
The Peninsula
