With oil prices expected to remain elevated, GCC governments are easing their budgets and restarting construction projects. For cement producers this is good news and the sector prepares for its revival as demand for its products is forecast to show significant growth in the short- to medium term. By U Capital Research, Oman.
The performance of the GCC cement sector was inevitably impacted during 2020-21 owing to restrictions in economic activities and lockdowns to combat the spread of coronavirus. However, sector dynamism returned swiftly, driven by a pick-up in economic activity amid the easing of COVID-19-related restrictions given faster-than-expected vaccinations.
In addition, a rise in government spending for an oil-dependent region such as the GCC, supported by a sharp recovery in average oil prices, led to a rebound in construction activity. These favourable developments resulted in higher demand for construction materials such as cement and steel.
