A strategy to overcome the effect of economic recession on construction industry in Oman

Abstract

Construction industry firms are affected by the financial fluctuations in the local and international markets. World countries have been exposed to many financial recessions such as the 2008 recession and the sharp decline in oil prices since 2014, which caused a major financial recession in countries that depend heavily on oil income in their economy like the Sultanate of Oman, where they constitute 70% of the national income. The research objective is to review previous literature review of some countries that have been exposed to economic recessions and how did these countries acclimatization to the recession. It will also focus on the strategies that followed by these countries to get out from the recession. Then, the research will identify the effects of the recession in the construction industry and the impact of it to the contractor in the Sultanate of Oman. Finally, a strategy will be suggested for the construction industry firm to use it through the economic recession to survive. The research methodology relies mainly on information provided by the Government of Oman through the National Center for Statistics and Information and through interviews with various construction specialists. The results show that most of the construction industry firms have been subjected to a great pressure due to the economic recession. The suggested strategy includes a procedure that assists construction firms to reduce expenses, how to bid and get new projects and create a new management style for the firm to cope with the developments and the volatility of the financial market.