It is just one example of how an oil-fueled construction boom in the Middle East is creating a big new market for Western industrial companies, even as their growth slows in the U.S. and other developed countries.
French turbine maker Alstom SA said its orders from the Middle East and Africa rose more than fourfold, to 4 billion euros, or about $6 billion, in the nine months ended Dec. 31, compared with the previous year. Heavy-equipment maker Caterpillar Inc. and conglomerate Honeywell Inc. also cited strong Mideast sales in their recent bullish financial results.
These companies and others are benefiting from an infrastructure boom financed by the rising price of oil. Consulting firm McKinsey & Co. estimates that the Gulf countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - are spending $230 billion annually on new hospitals, airports, railroads and power plants. That is nearly three times the $83 billion the countries were spending five years ago.
The region ''is on steroids,'' says Jean-Francois Seznec, a Georgetown University Arab studies professor and consultant.
Of course, the U.S. still imports more - $62 billion last year - from the Middle East than the $39 billion it exports there. But exports have grown faster since 2004, as oil soared to $100 a barrel, according to Bank of America. Europe exports more to the Middle East than it imports, the bank says.
For GE, the region is its biggest source of sales for jumbo-jet engines, and its fastest growing market for gas turbines and water-treatment technology. However, the headlong rush poses risks, as well as opportunities. The broader Middle East is politically unstable, and the large expatriate work force in the Gulf adds to the volatile mix.
In the UAE in May, workers seeking higher wages ransacked the offices of a U.S. contracting company. Western multinationals must navigate local rules. Several countries, for example, require foreign companies to sell through agents, which can cut into profits and can run afoul of U.S. laws. In addition, to win business companies must often show they will invest in the region.
