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Qatar construction costs highest in the GCC, says report

Construction costs remain high in Qatar compared to other countries in the Gulf Cooperation Council (GCC) region, according to the Arcadis construction costs report for 2016.11 Jan 2016

New York London and Hong Kong are the most expensive cities for construction, the report found. Doha comes in at number 12 on the Arcadis list, up from 16th place last year and ahead of Jeddah and Dubai.

The steep fall in the price of oil over the past year and the strength of currencies ties to the US dollar will have a long-term impact on construction costs in the GCC, Arcadis said.

However, Doha's progress towards being a major world city will continue, the report said.

"The Doha economy is expected to maintain double digit growth until 2019, supported by a number of large infrastructure investments in the World Cup and other major programs set by Qatar’s 2030 National Vision. Construction was one of the largest contributors to non-hydrocarbon GDP growth in 2014, increasing by 11.4%," it said.

Over the next 10 years, $150 billion is expected to be spent on infrastructure in Qatar, Arcadis said, although this growth is "subject to supply and logistics and there is a danger of substantial building material inflation unless the supply chain is carefully managed."

Arcadis compiles the annual report based in an index of construction costs around the world, comparing the relative prices of labour and materials required for different building types.

The annual GCC construction survey by Pinsent Masons, the law firm behind Out-Law.com suggested last month that there has been a fall in optimism in the GCC construction industry  over the past year, but that the UAE and Qatar are the most positively viewed markets.

Middle East infrastructure expert Sachin Kerur of Pinsent Masons, the law firm behind Out-Law.com said: "With a levelling off of activity in some areas of the GCC on account of lower energy prices, the inflationary climate may abate more quickly than would otherwise be the case."

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