The UAE, Saudi Arabia and Qatar are expected to provide huge growth opportunities for MEP services in the near future, a Frost and Sullivan report has found.
According to the report, compiled by Building Technologies Practices for the research firm, the three countries will have a combined share of around 89% of the overall MEP market. The remaining 11% will be made up by the remaining GCC member states.
“MEP services, in recent times, have evolved from a conventional service to an integrated service delivery pattern that encompasses services ranging from designing, procuring, supplying, installing, integrating, testing and commissioning,” the report said.
In addition, the focus of MEP services has shifted to operation and maintenance so as to be able to execute safer, comfortable and environmentally friendly operations for modern buildings.
According to Frost and Sullivan, the increased demand for electrical services in the building and infrastructure sectors has contributed to around 40% - 45% of the market, while mechanical services accounted for 35% - 40%. Plumbing services account for around 20% of the market.
The report forecasted that this demand would lead to an increased concentration on high rise buildings, malls and hotels, which offer better margins over the next three years.
Also, involvement in construction projects backed by government funding would create an ideal scenario for businesses to keep growing and remain profitable.
“In order to increase profitability, the big MEP contractors in the region will engage in huge, iconic , sophisticated and sustainable projects, by replicating and adopting the best practices in the industry, which are widely followed in highly developed markets,” the report added.
“On the whole, the shrink in profit margin that was experience in 2008 due to the crisis will no longer be a threat to market participants as more big ticket projects are expected to be on track, which will suppor the profit margins,” Building Technologies Practices said in conclusion.