Industry Spotlight: Construction
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By Sarah Bryn Witmer, Research Associate
Iran’s construction industry, currently valued at about $154 billion, is central to the country’s economy and promises steady growth. While the construction industry was in decline before international sanctions were lifted, it has made a quick turnaround: output value is expected to rise at a compound annual growth rate of 6.34% through 2020. Investment opportunities are also increasing as the country opens up to more international markets and new infrastructure is needed.
The Iranian government has made plans for multiple long-term construction projects to improve domestic and regional infrastructure. As population and urbanization increase, the Ministry of Housing and Urban Development is particularly drawing attention to the ample opportunity for residential housing developers to fill the gap. For example, there are currently just 700,000 housing units available each year to meet an annual demand of 1.5 million units. Iran is also focused on increasing its renewable energy capacity due to rising energy demands and obligations as a party to the Paris Agreement on Climate Change. Under the Paris Agreement, Iran has committed to curbing greenhouse gas emissions by reforming its power industry; plans are already underway for developing solar, wind, geothermal, and other renewable power plants to offset Iran’s dependence on fossil fuels.
Many existing projects in water treatment, tourism, and building rehabilitation are also in need of investment. International investors are getting into the action. In January of this year, Tehran hosted French Foreign Minister Jean-Marc Ayrault and over 100 delegates from many sectors of the French economy at the Iran-France business forum to discuss a wide array of industries, including those of construction, steel, and transportation. At the event, the two countries signed five new business agreements on boosting cooperation.
In addition to the infrastructure projects described above, plans were announced for major renovations to Iran’s existing rail network, both domestically as well as throughout Central Asia and the Persian Gulf. The government intends to add more than 10,000 km to Iran’s rail network by 2025. Other countries are joining Iran in this endeavor: in January 2016, the Islamic Republic of Iran Railways (IRIR) signed a memorandum of understanding with Germany’s Siemens, aimed at furthering rail infrastructure development. At a business forum in January of this year, IRIR also signed a memorandum with French National Railway Company SNCF with the goal of enhanced railway cooperation.
Below is information about an upcoming conference in Tehran, Iran, that looks to showcase the construction industry. For four days this April, construction manufacturers, exporters, and other industry leaders from around the world will come together to discuss needs, solutions, technology, and new projects.
Event:
Project Iran 2017
Where:
Tehran Permanent Fairground
When:
April 25-28, 2017
Additional details:
http://www.project-iran.com/
