Construction in Iran – Key Trends and Opportunities (H1 2021)

Iran’s construction industry is expected to have expanded marginally by 0.7% in 2020 – down from growth of 8% in 2019. The outbreak of the Coronavirus (COVID-19) pandemic, coupled with the steep decline in oil and gas prices, has weighed on the Iranian economy, which was already battered by the US sanctions that curb oil and gas exports, which are crucial for government revenues. The economic weakness amid the COVID-19 pandemic and the US sanctions, coupled with the depreciation of the currency and rising inflation, further weighed on the construction industry’s output last year.

As a result of the sanctions, oil revenue in the country fell from over IRR1.6 quadrillion (US$40 billion) in 2018 to less than IRR840 trillion (US$20 billion) each in 2019 and 2020, according to the Central Bank of Iran (CBI). Moreover, since early 2018, the value of the Iranian rial has fallen eight-fold, and inflation in the country has increased by at least 40% as of last year. In a positive development, however, the change in the US administration is expected to relieve tensions between the US and Iran, as the new president of the US, Joe Biden, is in favor of returning to the Iranian nuclear deal, which was previously abandoned in 2018. Despite this optimism, there have been delays in negotiation talks, as both countries wait for the other party to fulfil certain conditions.

GlobalData expects the country’s construction output to expand by 1.8% in 2021, before registering an annual average growth of 3.3% between 2022-2025. This will be supported by investments in the energy, oil and gas, petrochemicals, infrastructure and industrial sectors. In an effort to boost the economy and improve infrastructure, the Iranian government aims to complete over 3,900kms of new railways and roads by March 2022. Moreover, in March 2021, the government announced that IRR323.2 trillion (US$6.1 billion) will be invested on 62 projects in the industrial, mining and trade-related sectors. During mid-March 2020 to mid-February 2021, the government also approved 135 foreign investments projects worth IRR96.5 trillion (US$1.8 billion) in those sectors.

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

– Iran’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 Iran’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 Iran. It provides –

– Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Iran, 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 GlobalData'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 GlobalData's critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.

Table of Contents

Table of Contents

1. Construction Outlook

2. Construction Industry: At-a-Glance

3. Latest News and Developments

4. Project Analytics

5. Construction Market Data

6. About GlobalData

6.1 Definitions

List of Tables

List of Tables

Table 1: Construction Industry Key Data

Table 2: Iran, Top Construction Projects by Value

Table 3: Iran, Construction Output Value (Real, US$ Million)

Table 4: Iran, Construction Output Value (Nominal, IRR Trillion)

Table 5: GlobalData Construction Market Definitions

List of Figures

List of Figures

Figure 1: Iran, Construction Output Value (Real, US$ Million, 2017 Prices and Exchange Rate), 2016-2025

Figure 2: Iran, Construction Output Value, by Sector (Real, US$ Million), 2016-2025

Figure 3: Middle East and Africa, Construction Output (Real % Change), 2020 and 2021

Figure 4: Iran, Construction Projects Pipeline by Sector (US$ Million)

Figure 5: Iran, Construction Value-Add, IRR Billion, Base Year=1390, % Change YoY

Figure 6: Iran, Total Floor Space of Buildings Completed by the Private Sector in Urban Areas, In Thousands m2, Change YoY

Figure 7: Iran, Total Floor Space of Construction Permits Issued by Municipalities in the Urban Areas, In Thousands m2, Change YoY

Figure 8: Iran, Value-add of Wholesale and Retail Trade, and Accommodation and Food Service Activities, In IRR Billion, Base Year=1390, % Change YoY

Figure 9: Iran, Manufacturing and Mining Production Indices, 1390=100, % Change YoY

Figure 10: Iran, Electricity Generated, in TWh, % Change YoY

Figure 11: Iran, Total Floor Space of Residential Units Completed by the Private Sector in Urban Areas, In Thousands m2, Change YoY

Figure 12: Iran, Rental Housing Index in Urban Areas, 1395=100, Change YoY

Figure 13: Iran, Construction Projects Pipeline, Value by Stage (US$ Million)

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