May EN 2019

The construction industry, in general, and manufacturing and building materials in particular, require protectionist frameworks against the unfair competition of foreign companies, which seek to dominate the region's markets. Other challenges include energy and operating costs as well as hard-to-get finances for SMEs, the report added, noting that the current level of investments in the sector makes it difficult for the region to turn into consuming markets. 14 Challenges & Opportunities The report highlighted the challenges faced by primary sectors as an opportunitytodeveloptheirperformance and boost their competitiveness Solutions Al Mazaya's report highlighted anti- dumping duties as suitable solutions that can be applied to re-energise investments, bearing in mind that the effects of dumping duties on imports will push domestic prices up. However, prices will remain within the limits currently recorded with no negative bearing on sector performance or increasing recession prospects. The report stressed that the local building material industry is able to even meet higher domestic demand than the current ones, especially if current fees have been reconsidered. The report concluded by saying that such a solution is conducive to optimising total project costs and ensuring the attractiveness of real estate developments. While Saudi Arabia leads the construction industry at the regional level and has the highest domestic demand rates, pressures on its construction sector are casting a negative shadow on demand, in addition to creating difficulties in opening up new markets. In the meantime, the current low prices of building materials represent a catalyst for those seeking to build homes and investment projects, capitalising on the current stagnation witnessed in the construction sector, which led to a drop in demand for building material. Current industry indicators show positive signs of growth in the construction sector through the launch of various new projects with an average annual value of US$100 billion. Construction sector assets currently hit to the tune of US$53 billion, with the Saudi construction sector accounting for 39% of the entire GCC construction market. Mazaya Monthly Real Estate Report - Week 4 - May 2019