Construction in Iraq - Key Trends and Opportunities (H2 2021)

Iraq's construction industry is expected to post a strong rebound in 2021, but given the severe contraction recorded in 2020, output will remain below the pre-COVID-19 level until 2025. Construction activity is expected to have increased by 20.6% in real terms in 2021, following a 40.2% drop in 2020; although this high growth mostly reflects the very low base in 2020, when construction output plummeted by 54% in the second half of the year. Construction activity fell in the second quarter of 2021, with construction value add declining by 5.9% year on year (YoY) in Q2 2021, preceded by Y-o-Y growth of 2.7% in Q1 2021, according to the Central Statistical Organization of Iraq (CSO).

The industry is expected to register an annual average growth of 6.9% between 2022-2025, supported by investments on transport, oil, electricity, education, and housing infrastructure projects. In October 2021, Iraq awarded projects worth IQD8.5 trillion (US$6 billion) to China’s CITIC Construction to develop the 3,200MW Al-Khairat heavy oil power plant in Iraq. Moreover, the country is seeking international investors to build solar projects with a combined capacity of 750MW, in line with its aims to build 10GW of solar projects and raise the share of clean energy to 33% by 2030. Iraq also plans to reach 12,000MW of installed solar capacity by the end of the decade. Thus, the government has already made progress towards the goal and signed contracts for solar projects with international companies such as France's TotalEnergies, Saudi Arabia's ACWA Power, the UAE-based Masdar and PowerChina.

The government plans to strengthen the foundation for growth in key service sectors, with a focus on electricity infrastructure, water and sanitation, oil, transportation, and health in the country. Therefore, in order to achieve its aim, in December 2021 the United Nations Development Programme (UNDP), Iraq and the Japan International Cooperation Agency (JICA) signed a renewed partnership agreement to monitor and support acceleration of the implementation of socio-economic infrastructure projects in Iraq. The projects are implemented by the Government of Iraq with loan assistance from JICA, with the aim of improving the economic and living conditions of Iraqi communities. Moreover, the government is also planning to include major infrastructure projects in the 2022 Budget, including combined cycle power plants, Baghdad Metro (expected to commence the construction work in Q2 2022), Nasiriyah and Mosul airports, and infrastructure in Basra Governorate, which can provide an initial fillip to the economy that has been impacted by the COVID-19 pandemic.

This report provides detailed market analysis, information, and insights into Iraq’s construction industry, including:

• Iraq’s construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Iraq’s construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Iraq. It provides:

• Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Iraq, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using the analyst's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using the analyst's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.