Construction Industry of Iran

Posted on Posted in Business Guidelines

Iran’s construction industry is characterized by strong demand for housing, infrastructure development and modernization as well as industrial expansion. With recession started in Iran`s economy in recent years, housing has been affected too and with expected growth of Iran`s economy, it is estimated that the housing industry will start to grow again.

  • Expansion of the rail network from its current length of around 12,000 km to a total of 25,000 km in the next four years.
  • Road network: 1,200 km of motorway under construction, 1,300 km in the project phase and an additional 3,000 km being planned.
  • When it comes to producing energy, hydroelectric power plants play a key role. Some 150 dams have been built during the last 30 years, and another 84 are under construction or in planning.
  • Iran is the fourth-largest cement manufacturer in the world, with annual production of 70 million tons.
  • Because Iran’s population is younger than average, approximately one million new apartments are needed every year

Estimated Construction Cost & Trends


The BMI Research (formerly Business Monitor Online) revised its construction industry growth forecast for Iran in 2016 from 3.2 percent to 4.5 percent, thanks to the removal of the majority of international sanctions and release of new historic data.

The construction industry of Iran is divided into two main sections: the first is government infrastructure projects and the second is the housing industry. Most of 98% of housing industry is private-based and just 2% is public based.

Iran’s construction industry is set to perform well over the forecast period (2016–2020), with growth driven by investments in infrastructure, energy and residential construction projects. Improvements in investor and consumer confidence due to the lifting of international sanctions will also drive funds into construction projects. The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 6.34% over the forecast period, up from -1.64% during the review period (2011–2015).


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