This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/12/2019

Overview

In 2017, the International Trade Administration identified construction as a leading market for opportunities for U.S. firms.  Bahrain’s construction industry is projected to expand by 13.3 percent in 2018.  A key driver of this growth is a $32 billion infrastructure investment pipeline comprised of $10 billion in government funding, $7.5 billion from the GCC Development Fund, and $15 billion from the private sector.  This emphasis on construction is consistent with the Kingdom’s Vision 2030 economic development strategy.  The strategy seeks to improve infrastructure, industry, housing and connectivity and that calls for a more diverse economic base, with broader privatization, industrialization, training, and education of the Bahraini workforce.  

According to Bahrain Economic Development Board’s December 2017 quarterly report, Bahrain’s construction sector grew by over three percent in 2017.  Large-scale government infrastructure projects continue to stimulate the sector and have positive spillover effects in supply industries. 

The government has approved a number of major projects, including:

  • The $3.5 billion sixth production line at Aluminum Bahrain (ALBA) and  associated $800 million power station project
  • A $1.1 billion airport modernization program
  • A new $355 million gas plant. 
  • Major housing projects valuing $2.2 billion.
  • Electricity and water projects valuing $1.1 billion
  • Roads and sewerage projects valuing $900 million
  • An airport expansion project valuing $1.1 billion.
  • Gulf rail line development
  • Public transport network (due in 2030)
  • Construction of infrastructure for three planned cities
  • A new state of the art Exhibition Centre
  • Industrial development
A number of other projects underway focus on education, health, social development, youth, sports and industry, many of which will be funded by grants received from Bahrain’s wealthier neighbors via the GCC Development Fund.  The government is currently implementing the National Development Strategy 2015-2018 to ensure economically and ecologically sustainable growth and to better respond to the needs of the citizenry and the economy.

Leading Sub-Sectors

The demand for small housing units for medium-income families has increased dramatically in recent years.  There are approximately 60,000 Bahraini families on the government’s waitlist for subsidized housing.  The government is pursuing an ambitious program of developing 40,000 housing units within a decade.  Close to 15,000 units are under construction.  The major housing projects are East Hidd City, Diyyar Al Muharraq, Tubli Gardens, Argan, and the Naseej project in Northern City.  The Ministry of Housing has also launched a social housing financing program to support home purchases by nationals. 

In the private sector, major new freehold projects have been launched in Diyar al Muharraq, Dilmunia, and Durrat al Bahrain.  Among others, a 3,000-unit Deerat al Oyun project has commenced in Diyar al Muharraq.  Construction work on the $650 million Villamar project at the Bahrain Financial Harbour in central Manama is also resuming. 

Opportunities

One of the largest projects within this pipeline is the $1.1 billion airport modernization project.  The airport project is designed to double the passenger capacity of the facility to 14 million passengers a year by 2020.  The main contract was awarded to a consortium led by Arabtech Construction and TAV Construction in early 2017.  A number of U.S. firms have won contracts in the expansion. 
A new rail and road causeway project between Saudi Arabia and Bahrain is also planned.  The new project is a 25km-long rail and road that will connect to the main GCC railway and existing Saudi rail network.
State-owned companies also are proceeding with major projects.  In the manufacturing sector, landmark projects underway in downstream hydrocarbons and aluminum include the:
  • Bahrain Petroleum Company (BAPCO) modernization and expansion program
  • Bahrain LNG terminal construction
  • Bahrain National Gas Expansion Co. (BNGEC)
  • ALBA Line 6 expansion project
The retail and hospitality sector is also witnessing rapid growth, evident in the number of five-star hotels and shopping malls planned for the kingdom such as Dilmunia Mall and the Marassi Galleria shopping complex, to join the recently opened $159 million Avenues Mall at Bahrain Bay.  This retail expansion has branched out geographically to the west of the island, presumably to attract the many tourists coming from Saudi Arabia each week.  Several western projects underway include the construction of IKEA and the expansive Kingdom Mall.

Bahrain’s tourism strategy also extends to medical-tourism projects in expansions at King Abdullah Medical City and in mixed-use real estate projects such as Bahrain Bay, Bahrain Marina, Diyar Al Muharraq, Water Garden City, Dilmunia, and Marassi Al Bahrain.  

Other key developments expected to be completed in the near future:
  • The $120 Muharraq Water Front Project (Saada), consisting of retail establishments, a marina, entertainment facilities, a 4-star hotel, a multi-story car park, and a traditional souq.
  • The mixed-use Bahrain Marina in Manama, consists of a five-star hotel and hotel suites, apartments, villas, a shopping mall, entertainment and educational facilities, retail space, and a yacht club with space for 250 boats.

Leading Sub-Sectors

With revenues from oil exports accounting for 75 percent of government income in 2017, the Bahraini Government is seeking to diversify the economy and income sources from other sectors.  Targeted areas for manufacturing include plastics, fiberglass, chemicals, petrochemicals, and food processing.  The Bahraini Government is placing particular emphasis on developing the petrochemical industry.  Five petrochemical sub-sectors have grown rapidly in recent years:  construction chemicals, water treatment chemicals, polymer and plastic additives, paints and coating additives, and oil field chemicals.

Web Resources

www.bahrainedb.com
www.trade.gov/topmarkets/
www.data.gov.bh/

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