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Iraq Construction Market Size, Trends and Forecast by Sector – Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Construction, 2020-2025

The construction market output in Iraq was valued at $9.3 billion in 2020 and is forecasted to record a growth of more than 20% in 2021. In 2021, the high growth mostly reflects the very low base in 2020, when construction output plummeted by 54% in the second half of the year. Residential construction represented the largest sector in Iraq’s construction market in 2020, followed by energy & utilities, infrastructure, commercial, industrial, and institutional.

The construction industry is expected to register an annual average growth rate of more than 6% during 2022-2025, supported by investments in transport, oil, electricity, education, and housing infrastructure projects. In October 2021, Iraq awarded projects worth IQD8.5 trillion ($6 billion) to China’s CITIC Construction to develop the 3,200MW Al-Khairat heavy oil power plant in Iraq.

Overview of construction market in Iraq

Overview of construction market in Iraq

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What are the construction market dynamics in Iraq?

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, 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 the 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.

Construction market in Middle East & North Africa, construction output (% change), 2020

Construction market in Middle East & North Africa, construction output (% change), 2020

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In October 2021, the Ministry of Oil stated that the Iraqi government had signed an agreement with a consortium led by Scatec, a Norwegian renewable energy systems company, to build a 525MW solar project in the governorates of Karbala and Babylon. The IQD729.4 million ($500 million) project is part of the plans to develop 7.5GW of renewable power before 2023. The other companies in the consortium are Egypt’s Orascom Construction and Iraq’s Bilal.

What are the sector classifications in Iraq’s construction market?

Commercial construction market in Iraq: The commercial construction sector, which shrunk in 2020, is expected to recover steadily over the forecast period, supported by the government’s focus on reviving the country’s ailing economy and attracting tourists to the country, following months of border restrictions. The country has started to grant entry visas to foreigners so that they can visit touristic, religious, and heritage sites.

Industrial construction market in Iraq: The sector is expected to register a moderate growth rate over the forecast period. This growth will be supported by a recovery in economic conditions, coupled with investments in the country’s industrial zones. In May 2021, the Basra Investment Commission (BIC) approved a plan to build a new steel plant and an industrial zone in the southern oil hub of Basra.

Infrastructure construction market in Iraq: The sector is expected to record a significant growth rate over the forecast period, supported by public and private sector investments in road and rail infrastructure projects and cross-border transport infrastructure projects. The sector’s output over the forecast period will also be supported by the National Development Plan 2018-2022, under which the government plans to spend IQD39.6 trillion ($27.1 billion) on the development of transport infrastructure by 2022.

Energy and utilities construction market in Iraq: The sector is expected to record a significant growth rate over the forecast period, supported by the government’s plan to develop the energy sector. Electricity demand in the country is expected to rise to 32GW by 2028, and as a result, the total installed power generation capacity must be increased by 20GW by 2028, compared to 2017 levels.

Institutional construction market in Iraq: Over the forecast period, the sector’s growth will be supported by the government’s focus on the health and education sectors, in line with the rising elderly population in the country and to address the shortage of schools. In July 2021, the government announced that China will construct 1,000 healthcare facilities in the country.

Residential construction market in Iraq: GlobalData expects residential sector output to increase during the forecast period, supported by the government’s plans to develop the country’s housing sector. In April 2021, the government announced a plan to build 12 new residential cities in various governorates, as part of the post-war housing program to tackle a housing crisis caused by war damage, as well as address rapid population growth.

Construction market in Iraq, by sector

Construction market in Iraq, by sector

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Market report scope

Market size (Year – 2020) $9.3 billion
Growth rate CAGR of >6% from 2021 to 2025
Base year for estimation 2020
Segmentation by sector Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional, and Residential

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

  • Historical (2016-2020) and forecast (2021-2025) valuations of the construction market in Iraq, featuring details of key growth drivers.
  • Segmentation by sector (commercial, industrial, infrastructure, energy & 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.

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. Risk Profile

7. About GlobalData

7.1 Definitions

7.2 CRI Methodology

List of Tables

List of Tables

Table 1: Construction Industry Key Data

Table 2: Iraq, Top Construction Projects by Value

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

Table 4: Iraq, Construction Output Value (Nominal, IQD Billion)

Table 5: GlobalData Construction Market Definitions

Table 6: Risk Dimensions

Table 7: Ratings, Scores and Definitions

List of Figures

List of Figures

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

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

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

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

Figure 5: Iraq, Construction Value Add (IQD Billion, Constant Prices 2007=100)

Figure 6: Iraq, Construction Projects Pipeline, Value by Stage (US$ Million)

Figure 7: Iraq, Risk Summary

Figure 8: Iraq, Risk Regional Comparison

Frequently Asked Questions

The construction market output in Iraq was estimated at $9.3 billion in 2020.

The construction market in the country is projected to grow at a CAGR of more than 6% between 2021-2025.

Key sectors in Iraq’s construction market include commercial, industrial, infrastructure, energy & utilities, institutional and residential.

Iraq Strategic Crude Oil Export Pipeline and Az Zubair Oil Field Redevelopment are the top constructions projects in Iraq’s construction market.

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