The price of oil bears less significance to the construction industry now than it did two years ago, with other issues starting to hold a greater importance in the sector, the head of Laing O’Rourke’s Middle East business told Construction Week.
Mark Andrews, managing director of Laing O’Rourke Middle East, said: “I think if you go back to 2016, the oil price was probably that much more significant for the construction industry here in the Middle East.
“In the intervening period, there have been a raft of further economic issues at a global level and on a local level that probably mean that the recent increase in oil prices isn’t going to make such a massive difference moving forward.”
According to data from research firm Statistica, the average crude oil price by the Organization of the Petroleum Exporting Countries (OPEC) in 2018 so far stands at $68.31 per barrel, a modest rise on 2017’s $52.51 per barrel average, and a 68% increase on 2016, when the yearly average stood at a decade low of $40.68 per barrel.
Andrews added: “If you look at the market here at the moment, we all know there are liquidity issues; there are concerns too about what’s going on with economic growth and certainly about what’s going to happen post-Expo [2020 Dubai].
“That is not about oil price. I don’t think it’s going to fundamentally change [those questions].”
Whilst the region generally benefits when the oil price goes up, he said, considering “everything else that’s going on in the world and here, it becomes less a significant issue”.